In a further bid to hike coffee prices in preparation for the new crop hitting local markets this month, deputy commerce minister Paitoon Kaewthong has revealed the intention of the Thai government to ask Nestlé to buy from local coffee producers.
The Thai unit of Swiss foods giant Nestlé is the largest domestic consumer of coffee beans, and the government hopes that if it can secure the purchase of near on 25,000 metric tons of its locally grown stock, Nestlé can account for nearly all of the 27,595 tons to be sold on the domestic market from the 2000/1 crop.
The remainder of this season’s crop, estimated to reach 82,595 tons, has been earmarked for export, but is hampered by weak world prices. Following a similar strategy to that of January this year, Paitoon revealed that the government’s interventionist policy would become effective if the world price remains lower than 32 baht per kilogram. It is currently languishing at just over 17 baht.
Nestlé, together with other domestic users, will be asked to purchase the local coffee at a price not lower than 32 baht, and if they refuse then farmers will sell all their produce to the government, under a state-run programme instituted by the Public Warehouse Organisation. .
A meeting between the government and local coffee manufacturers is expected to be scheduled soon, but as yet a date has not been finalised.
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