Processing powdered coffee at Vuong Thanh Cong Production and Trading Company Limited in Buon Ma Thuot city, Dak Lak province. Photo: Vu Sinh/TTXVN
The domestic coffee price has now exceeded 130,000 VND/kg and is higher than the price of pepper. Regarding exports, according to the General Department of Customs, by April 15, Vietnam had exported about 660,000 tons of coffee with a turnover of over 2.23 billion USD. The average export coffee price in the first quarter of 2024 reached 3,289 USD/ton, up 48% over the same period last year. However, in the first half of April 2024 alone, the average export coffee price increased sharply and reached 3,790 USD/ton.
According to the Vietnam Coffee and Cocoa Association (Vicofa), prices are increasing but the amount of Vietnamese coffee is running out. Inventories in businesses and farmers are not much, so export volume from now until the end of the season will decrease.
Mr. Do Ha Nam, Vice Chairman of the Vietnam Coffee and Cocoa Association, said: In the first 6 months of the 2023 – 2024 coffee crop year (from October 2023 – March 2024), Vietnam exported 956,000 tons of coffee. coffee, total turnover reached more than 3 billion USD. Thus, Vietnam has exported about 60% of the total expected output of about 1.6 – 1.7 million tons of the current crop year.
With current domestic coffee prices, coffee farmers in the Central Highlands who still have stock will win big. Many farmers are regretful because they no longer have goods to sell. Along with that, there is not much supply on the market, so purchasing businesses still have to struggle to find goods.
According to Mr. Le Duc Huy, Director of Dak Lak 2-9 Import-Export Company Limited, people have changed their crop structure quite strongly, which has somewhat impacted the domestic coffee supply. The supply among the people is still there but it is small. Households that have stocked up to this point have mostly been able to cover the costs and capital for tree care, so they will not sell.
“The new crop will not come for another half a year, so it is even more difficult to predict coffee prices in the future,” Mr. Huy said.
According to Mr. Le Duc Huy, most businesses do not dare to sign orders if they cannot proactively source goods. Most businesses also anticipated the difficult situation in output, so the orders that have been committed to date have been purchased in full. With the current sharp increase in prices, buyers are basically more cautious and will only buy when they really need it.
Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee and Cocoa Association, commented: Never before has coffee prices been as high as this year. The sharp increase in prices has caused the purchasing capacity of businesses to decrease and there has been a phenomenon of supply chain disruption for businesses buying and selling far away, future contracts have very high risks.
While Vietnam has until October 2024 to harvest the new coffee crop, the current severe dry weather in the Central Highlands also makes farmers worried about the next crop’s coffee output.
However, although investment in coffee trees is quite high in the context of high fertilizer prices and watering costs in the context of drought that still shows no signs of ending, many farmers who once neglected coffee trees have now abandoned them. Start investing again in this crop.
In addition, due to concerns about supply shortages due to prolonged hot and dry weather in major coffee producing countries in Southeast Asia; Among them, Vietnam has pushed up the price of Robusta coffee futures on the London exchange at times to exceed 4,000 USD/ton. This is a record high since coffee futures began trading in 2008.
According to Mr. Carlos Mera, in charge of agricultural products at Rabobank (Netherlands), prolonged hot weather in Southeast Asia greatly affects the coffee crop, exacerbating the current supply constraints. , motivating coffee processors to increase shipments. In addition, processors are also trying to increase reserves before the new European Union (EU) law banning coffee grown on deforested land takes effect in December this year.
Meanwhile, it is forecast that global coffee bean consumption in the 2023-2024 period will increase by 20% compared to the 2013-2014 crop year, with notable growth in Asia. The US Department of Agriculture (USDA) reported that consumption in major producing countries such as Indonesia increased by 90%. Or China, the world’s seventh largest coffee consumer, is recording a 130% increase. Coffee crop developments in Brazil – the world’s largest coffee supplier – are approaching the focus of the market.
Facing major challenges such as area decline due to crop restructuring and climate change leading to a decline in output, Mr. Le Duc Huy said that this is the time for members of the coffee supply chain to It is necessary to discuss difficult issues and cooperate in the spirit of sharing and accompanying development. At the same time, there is a selection and gradual removal of seasonal and unreliable business units and partners from the supply chain. In addition, key coffee growing localities in the Central Highlands also need solutions to increase coffee output and quality through improving varieties and gardens, applying new farming techniques, and adapting to climate change. Climate Change.
