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Published on August 9, 2019

Coffee Business of Laos


Coffee first appeared in Laos while the country was still part of French Indochina. The colonists realised that the condition in the Bolaven Plateau due to its high altitude up to 1,300 meter at a latitude of 15 degrees north in mineral-rich red soils with cool temperatures and abundant rainfall has potential to grow coffee.

A coffee picker picks ripe arabica coffee. Sinouk Coffee is the only certified organic coffee production in Lao PDR that is allowed to export to the european market. The Bolaven Plateau is the most important coffee production area in Laos due to it’s excellent soils. © 2011 GIZ/Lucas Wahl/Kollektiv25/Agentur Focus

Their early attempts to plant coffee in 1915 and 1917 both failed due to lack of care. The French were finally successful in harvesting coffee in Laos in the 1930s with annual production peaking at 5,000 tons. The potential was there but within two decades most of the trees have died.

When the communists took over the country, coffee plantations fell out of favor as coffee was considered a drink for the wealthy upper class. Their attitude to private business softened in the 1990s resulting in many small coffee plantations started to resurface in the Bolaven Plateau. Lao coffee appeared on the international markets, however, was sold at a huge discount because of its lower quality.

When the communists took over the country, coffee plantations fell out of favor as coffee was considered a drink for the wealthy upper class. Their attitude to private business softened in the 1990s resulting in many small coffee plantations started to resurface in the Bolaven Plateau. Lao coffee appeared on the international markets, however, was sold at a huge discount because of its lower quality.

On a global scale Laos has yet to earn serious recognition as a coffee producer, rather it’s more of a tourist attraction of poor farmers being seen toiling to carve out an existence on the Bolovan Plateau’s coffee covered terrace and the charming Sinouk Coffee Resort with its manicured gardens, nature trails and plantation tours were it’s all about being organic.

The reality is that coffee like oil and gold is a trade commodity. The futures Price for Robusta being set by brokers in London with their counterpart in New York deciding the fate of the Arabica bean. What determines the price is the quality of the organic Laos coffee bean rather speculation on how many people with drink coffee.

Laos’ coffee exports topped $74 million in the first six months of 2017, an increase of $50 million compared to the same period in 2016. The Lao Coffee Association projected that the value of coffee exported by Laos was expected to exceed $112 million in the 2017 fiscal year, an increase of 3 percent compared to the previous year. Vietnam imports about 50 percent of Laos’ total Arabica coffee output, or 30,000 tons, every year, and the figure is steadily increasing. The Dao-Heuang Group is the top coffee producer in Laos and is expanding its overseas sales network to China.

The Coffee Producers Cooperative (CPC) or The “Association des Groupements de Producteurs de Café du Plateau des Bolovens” (AGPC) as they were previously known are a relatively new group of coffee producers who are seeking to cash in the changing tastes of the domestic consumer offering them much needed variety. They were created in 2007 through a French funded project with the support of the Lao government. It’s owned by more than 1800 families who represent about 20% of the small coffee farmers on the plateau.

With today’s consumers making more ethical and health driven choices about what they want to consume, CPC’s Fairtrade and Organic certifications are bringing wider economic benefits to small coffee growers enabling them to earn a higher price for their produce.

It sets strict quality specifications and it’s organic certification has seen smaller farmers selling their green beans to coffee roasters across the globe from France and Sweden, Japan and South Korea to as far as New Zealand.

The projects strength is due to 100% ownership by the coffee growers which ensures that even the smallest farmer is a stakeholder which gives them a vested interest in the organisation thriving. Not only does it promote and market it’s members’ products but also offers financial and technical support. Importantly by earning a higher income CPC is able to invest in the future of its members in terms of local health, education and infrastructure.

As the coffee culture continues to grow both domestically, initiative as CPC show that Lao coffee producers are in a strong position to increase their share of the global coffee market, yet at the same time ensuring that the little man, the small growers also benefit.

Coffee first appeared in Laos while the country was still part of French Indochina. The colonists realised that the condition in the Bolaven Plateau due to its high altitude up to 1,300m at a latitude of 15 degrees north in mineral-rich red soils with cool temperatures and abundant rainfall has potential to grow coffee.

Their early attempts to plant coffee in 1915 and 1917 both failed due to lack of care. The French were finally successful in harvesting coffee in Laos in the 1930s with annual production peaking at 5,000 tons. The potential was there but within two decades most of the trees has died.

When the communists took over the country, coffee plantations fell out of favor as coffee was considered a drink for the wealthy upper class. Their attitude to private business softened in the 1990s resulting in many small coffee plantations started to resurface in the Bolaven Plateau. Lao coffee appeared on the international markets, however, was sold at a huge discount because of its lower quality.

On a global scale Laos has yet to earn serious recognition as a coffee producer, rather it’s more of a tourist attraction of poor farmers being seen toiling to carve out an existence on the Bolovan Plateau’s coffee covered terrace and the charming Sinouk Coffee Resort with its manicured gardens, nature trails and plantation tours were it’s all about being organic.

The reality is that coffee like oil and gold is a trade commodity. The futures Price for Robusta being set by brokers in London with their counterpart in New York deciding the fate of the Arabica bean. What determines the price is the quality of the organic Laos coffee bean rather speculation on how many people with drink coffee.

Laos’ coffee exports topped $74 million in the first six months of 2017, an increase of $50 million compared to the same period in 2016. The Lao Coffee Association projected that the value of coffee exported by Laos was expected to exceed $112 million in the 2017 fiscal year, an increase of 3 percent compared to the previous year. Vietnam imports about 50 percent of Laos’ total Arabica coffee output, or 30,000 tons, every year, and the figure is steadily increasing. The Dao-Heuang Group is the top coffee producer in Laos and is expanding its overseas sales network to China.

The Coffee Producers Cooperative (CPC) or The “Association des Groupements de Producteurs de Café du Plateau des Bolovens” (AGPC) as they were previously known are a relatively new group of coffee producers who are seeking to cash in the changing tastes of the domestic consumer offering them much needed variety. They were created in 2007 through a French funded project with the support of the Lao government. It’s owned by more than 1800 families who represent about 20% of the small coffee farmers on the plateau.

With today’s consumers making more ethical and health driven choices about what they want to consume, CPC’s Fairtrade and Organic certifications are bringing wider economic benefits to small coffee growers enabling them to earn a higher price for their produce.

It sets strict quality specifications and it’s organic certification has seen smaller farmers selling their green beans to coffee roasters across the globe from France and Sweden, Japan and South Korea to as far as New Zealand.

The projects strength is due to 100% ownership by the coffee growers which ensures that even the smallest farmer is a stakeholder which gives them a vested interest in the organisation thriving. Not only does it promote and market it’s members’ products but also offers financial and technical support. Importantly by earning a higher income CPC is able to invest in the future of its members in terms of local health, education and infrastructure.

As the coffee culture continues to grow both domestically, initiative as CPC show that Lao coffee producers are in a strong position to increase their share of the global coffee market, yet at the same time ensuring that the little man, the small growers also benefit.

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