Lao Voices

Producers seek niche market for roasted coffee

The production of Lao coffee is projected to decline this year due to irregular rainfall, but exporters will focus on creating value added products and seek out foreign niche markets for roasted Lao coffee.

Last year 20,000 tonnes of coffee beans were grown, the highest yield ever in the history of the industry in Laos, with an export value of US$30 million.

President of the Lao Coffee Association Sinouk Sisombat said production would decline to about 15,000 tonnes this year due to inconsistent rainfall when the trees were in bloom and the resultant small beans.

However, coffee prices on the world market have soared this year, which has helped to compensate for the lower yield.

The cost of robusta was US$1,875 per tonne on December 18 last year, rising to US$2,544 on February 25 this year and falling to US$2,229 on April 2.

Laos exports almost all of its coffee. Last year, only 500 of the 20,000 tonnes produced were sold in the country.

Mr Sinouk said producers mostly export unprocessed coffee beans, which earn less than roasted and instant coffee. For instance, raw coffee sells for only US$2 per kilogram, but roasted coffee sells for US$10.

Unfortunately, most consumers of Lao coffee in other countries have no idea they are drinking a cup of Lao coffee because importers don’t label the product as being sourced in Laos.

“If we continue to export only coffee beans, in 100 years’ time people still won’t know they’re drinking Lao coffee,” Mr Sinouk said.

“Now we can sell our coffee beans anywhere in the world, but this does not earn us a reputation as the producer of a quality product. To penetrate the overseas roasted coffee market, we have to attend international exhibitions so that people can taste our coffee.”

Members of the Lao Coffee Association have exhibited their products in several countries, including Thailand, China and Singapore .

Mr Sinouk has just returned from an exhibition held in Thailand last month and plans to attend another there in May.

He is confident that Thailand will become one of the main markets for roasted Lao coffee as many Thai buyers liked what they tasted at exhibitions and placed orders.

Since 2004, Laos has exported roasted coffee to a number of countries, including America, Japan, Thailand and Vietnam, but does not receive regular orders from these buyers.

This is attributed to the fact that Lao coffee companies are small-scale operators and have not built up a global network. They have a small marketing budget and brand recognition remains low.

But Lao coffee is building a reputation in many countries for its good quality. The association does not aim to compete with producers in terms of quantity, but will focus on quality, as there are already several Asian nations producing large amounts of coffee.

Vietnam, for example, produces one million tonnes a year and Indonesia has yields of 400,000-500,000 tonnes a year.

By Somsack Pongkhao
17, 2008
Vientiane Times - Vientianetimes.org.la