Exchange in the central highlands' Buon Ma Thuot city to make life easier for farmers and traders.
The Buon Ma Thuot Coffee and Commodity Exchange (BCCE) will officially come into being today, March 10, and is expected to help farmers take the initiative in purchasing matters.
BCCE has its origins in the Buon Ma Thuot Coffee Exchange Center, which had charter capital of VND75.5 billion ($3.6 million), of which the Dak Lak People’s Committee accounted for 42 per cent.
BCCE will connect with international trading floors such as the Chicago Mercantile Exchange (CME). Besides Robusta coffee, BCCE will also be involved in pepper and rubber trading.
Mr. Tran Thanh Hai, General Director of BCCE, said that Vietnam exported 1.6 tons of coffee last year but turnover was just $3.5 billion, making it far less effective than other coffee exporting countries, especially those specializing in Robusta.
He added that in many other countries Robusta coffee growers earn $10 billion each year, while Vietnam earned its modest export turnover despite accounting for nearly half of the global Robusta output. “Through the BCCE, coffee will be bought at farms and sold directly to London coffee exchanges, avoiding any price squeeze,” said Mr. Hai.
The Buon Ma Thuot Coffee Exchange Center was established in 2008 but was ineffective due to a lack of capital. The establishment of BCCE is therefore expected to help farmers decide on any problems in transactions and promptly seize any opportunities.
The commodity exchange model has existed for a long time around the world, such as the Chicago Board of Trade (CBOT) established in the US in 1848 and other exchanges appearing in Malaysia in 1980, in China in 1988, and in Thailand in 1999.
Buon Ma Thuot is the capital city of Dak Lak province in the central highlands and is known as the regional “coffee capital”. Dak Lak has 178,900 hectares of coffee, with output reaching 350,000 tons per year. Its coffee products can be found in 70 countries and territories around the world.