Vietnam Attracts Coffee Companies Seeking Supply, Dreyfus Says

Oct. 17 (Bloomberg)—International companies are expanding in Vietnam, the world’s largest producer of robusta coffee, to ensure supplies after local traders failed to fill contracts, according to Louis Dreyfus Commodities SA.

Disputes between exporters in growing countries and members of the Swiss Coffee Trade Association increased after prices jumped as much as 55 percent in the past year, said Nicolas Tamari, head of the Geneva-based association. There may have been “some movements in timing” on contracts and “we can’t say who is right and who is wrong,” Luong Van Tu, chairman of the Vietnam Coffee & Cocoa Association, said by phone Oct. 7.

Vietnam became the world’s largest producer of robusta in 1997-98, displacing Indonesia, and was the second-biggest for all types of coffee by 1999-2000, according to the U.S. Department of Agriculture. Vietnam’s crop doubled since 1999- 2000 as roasters sought to cut expenses by using more robusta, which costs about 60 percent less than the arabica preferred by Starbucks Corp., the world’s largest coffee-shop operator.

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