Coffee beans are on the boil

Photo by: Don Weinland

Im Saroeun, a coffee farmer at the Coffee Plantation Resort, examines arabica plants in Sen Monorom, in Mondulkiri province. Farmers are turning to the crop, claiming demand is outstripping supply.

---

A lot of customers are aware of Cambodian coffee now. They know the quality is better...

---

Mondulkiri province
Coffee plantations in Cambodia’s northeast are struggling to keep up with rising international demand for the increasingly lucrative beans, farmers and traders said.

Orders for Cambodian-grown coffee beans from countries such as Japan and Korea as well as domestic demand has increased rapidly, while prices have jumped nearly 40 percent since 2009, traders said.

Higher prices are ushering more farmers into the market, but supply from Mondulkiri province’s roughly 30 hectares of coffee plantation is falling short.

Im Saroeun, a farmer at the Coffee Plantation Resort in Mondolkiri province, said his plantation is turning down contracts from foreign importers. It simply cannot fill the orders, he said.

“More and more companies are coming from abroad,” Im Saroeun said as he strolled through the arabica and robusta plants. “A Korean company came here a few weeks ago. They wanted to sign a contract with us, but we didn’t have enough space.”

The Coffee Plantation Resort, a three-hectare coffee farm about two kilometres from the provincial town of Sen Monorom, exported five tonnes of coffee beans to Vietnam and South Korea in 2010, Im Saroeun said. While the plantation’s yields remain constant, the price of unground beans rose by about 15 percent since last year, he said.

The coffee growing industry is still in its infancy in Cambodia. Ministry of Commerce statistics didn’t keep track of exports in 2010, but shows total exports were worth US$226,000 in the first six months of 2011.

Nearby Vietnam is the world’s second largest exporter of beans and has seen demand outpace supply in recent weeks. It exported 1.09 million tonnes of coffee worth US$2.3 billion during the 2010-2011 growing season, Dow Jones reported previously.

Some Cambodian farmers are keen on the crop. Mondulkiri Coffee, one of Cambodia’s largest coffee traders, is discussing a 20 tonne-per-month deal with a Japanese company, Manager Nun Dima said.
The province’s total yearly coffee output, however, is about 100 tonnes.

The scale of the Japanese deal would require Mondulkiri Coffee to buy up beans from other coffee-producing provinces such as Siem Reap and eventually cultivate larger plantations in Mondulkiri province, he said.

Domestic demand for locally-grown coffee has also seen dramatic increases during the past three years as local restaurants and supermarkets have turned away from Vietnamese coffee imports, traders said.

With customers such as Lucky Department Store, Mondulkiri Coffee’s domestic sales have increased nearly 2,000 percent since 2009, Nun Dima said.

“When we started here, we sold about 20 containers [140 kilogrammes] monthly. Now we sell up to 400 containers [2,800kg] in a month to local businesses,” he said.

Tan Titi, manager at Chay Mao Coffee, attributes increased local demand to product recognition.

“A lot of customers are aware of Cambodian coffee now. They know the quality is better than before,” he said.

Chay Mao Coffee, which grows and sells coffee to Bayon Supermarket, saw a 50 percent increase in sales this year, Tan Titi said.

The company also recently showcased their product at exhibitions in India and Korea.

There is still plenty of room for growth in the domestic market, Num Dima said. Coffee shops catering to locals largely serve cheaper, Vietnamese coffee.

The Cambodian coffee industry will need to increase efficiency and lower prices before it captures the lower end of the market, he said.