According to experts, the lack of supply in the world’s main coffee exporting countries will likely cause the upward trend in the price of this commodity to continue.
Coffee prices increase due to lack of supply
Last week, coffee prices in the world market increased sharply again. Domestic coffee prices are also on the rise, along with world coffee prices. In the past week, the price of coffee has increased by 500-600 VND/kg, reaching the milestone of 47,000 VND/kg yesterday (November 28).
A representative of the Vietnam Coffee and Cocoa Association said that the 10-year cycle of the coffee industry is returning. Coffee prices are expected to peak at the end of the year.
The reason for the sharp increase in world coffee prices is the lack of supply, especially in Brazil, the world’s largest coffee exporter. In addition, high transportation costs have pushed up coffee prices. Experts even forecast that this upward trend will continue from now until the end of the year.
During the last session of the week, coffee prices simultaneously went up. Accordingly, the price of Robusta coffee in London delivered in January next year increased by 0.48% to $2,295 per ton. The price of Arabica coffee delivered in December in New York also increased by 1.55%.
Tight supply, high shipping costs, lack of containers and complicated developments of the COVID-19 epidemic have caused coffee prices to increase continuously since mid-November.
A report by the Association of Coffee Exporters of Brazil, the world’s largest coffee exporter, shows that there may be a delay in delivery of about 5 million bags of contracted coffee before the end of the year.
“The lack of water prevents the coffee plant from growing. Moreover, the frost caused many trees to die. We don’t have enough coffee to supply the market like every year“, said Mr. Joao Felipe Balise, Mayor of Caconde, Brazil.
It is expected that Brazil can only export 21 million bags of coffee in the 2021-2022 crop year, down 55% compared to the 2020-2021 crop year due to depleted supply.
In Colombia, the world’s third largest coffee exporter, coffee production in the first 10 months of the year reached about 10.1 million bags, down 6% over the same period in 2020.
The Colombian Coffee Association forecasts that this country’s coffee production in the near future will likely continue to decline due to unfavorable weather in recent weeks. In particular, a lot of rain has affected the coffee harvest as well as the flowering ability of coffee trees in the new crop.
Experts say that the lack of supply in the world’s main coffee exporting countries will likely cause the upward trend in prices to continue until the end of this year.
The demand for coffee in China has increased sharply
In the context of world supply shortage, recently, the demand for coffee in China – the most populous country in the world, has continuously increased, especially in urban areas and young people. the age. Meanwhile, the supply of coffee in this country is still limited.
Therefore, China is becoming a fertile market for coffee exporting countries as well as major coffee chains in the world.
American coffee company Starbucks is planning to increase its total number of stores in China to 6,000 next year. Currently, this leading coffee chain in the world has opened more than 5,000 stores in many cities in the country of more than 1.4 billion people.
“The coffee market has a lot of potential in China, because not only young people like it, but also people over 50 like to enjoy it,” said Ma Yujie, a Beijing resident.
The instant coffee segment holds a significant share of the market thanks to its ease of use. Rising household spending, changing lifestyles and acceptance of Western cultural trends by middle-class consumers have all contributed to an increase in demand for instant coffee across China.
According to statistics from the China Coffee Association, the country’s coffee consumption is growing at an annual rate of 15%, and is expected to reach an average growth rate of 10.15% in the next 5 years. The COVID-19 epidemic is complicated but still does not reduce the demand for coffee, because people are turning to home consumption more.
Particularly from October 2020 to April this year, China’s coffee consumption reached about 3.7 million bags of 60 kg coffee. Meanwhile, China’s coffee output is only about 1.8 million bags. So China is heavily dependent on imports.
Data from China’s Customs Administration showed that the country’s coffee import turnover in the first nine months of the year reached $387.76 million, up 75.3% over the same period in 2020.
The supply of coffee to China is diversified with about 80 supply markets; in which, the main coffee supplying markets for China include Brazil, Vietnam, Ethiopia, Malaysia, and Guatemala. Notably, China’s coffee imports from Ethiopia have doubled over the same period in 2020.
How to increase coffee market share in China?
The Chinese coffee market is full of potential for exporting countries. However, according to statistics, Vietnam’s coffee market share in total imports from China in the first nine months of this year accounted for 11.9%, down 0.4% – compared to 12.3% in the same period last year. 2020.
Therefore, in order to increase market share in China, the Import-Export Department has recommended that the Vietnamese coffee industry actively innovate designs, product packaging and improve quality to meet the increasing demands of coffee consumers. consumers.
Besides, businesses can focus on social media platforms and online distribution channels to promote and build product brands.
According to VTV