>> Soaring coffee prices cause companies to scramble

Domestic coffee companies are extremely worried about new foreign competition.

Since the beginning of the year, dozens of foreign companies have started operations in Vietnam to buy raw coffee from growers in the Central Highlands.

A number of foreign businesses have come to the district looking to purchase raw coffee, even though they go through dealers instead of buying directly from locals, said Tran Viet Thuan, a coffee grower, in Lam Ha District, Lam Dong Province.

It takes farmers just 1 or 2 days to receive payment after selling coffee to foreign firms, but up to 3 to 4 days to get money from domestic buyers. Meanwhile, foreign businesses often buy the coffee at higher prices, Thuan said.

Domestic coffee enterprises are worried that the participation of foreign companies has contributed to recent price hikes in coffee.

This could benefit growers, however, because the competition posed by foreign buyers could lead to higher revenues for the farmers.

Domestic buyers, on the other hand, are scared that the market may become dominated by foreign companies.

Rice and coffee are the two most important agriculture products for the country. As for rice, Vietnam has installed barriers to foreign enterprises: they have to meet a long list of requirements in order to be able to trade in Vietnam. Meanwhile, there are currently no protections for domestic coffee enterprises.