Supply glut heats up Vietnam coffee derivatives market

Pile of coffee beans

Vietnam's coffee producers and exporters are staring at the wrong side of a price spike and with oversupply set to continue, it should pave the way for deepening coffee derivatives use, despite obstacles that may remain in the market. Since banks in Vietnam first started offering hedging products for the coffee market in 2006, there has been solid growth in activity, with commodity derivative pioneer BIDV reporting average year-on-year volume gains since then of 10% annually. Players have rep