According to a survey by Nguoi Lao Dong Newspaper reporter, on September 19, coffee prices in the Central Highlands provinces continued to increase sharply to over 68,000 VND/kg, the highest price in more than 10 years. Particularly in Dak Lak, coffee price increased 300 VND/kg compared to the previous day, to 68,200 VND/kg.
Farmers ran out of goods to sell
Mr. Nguyen Van Thach (living in Krong Pak district, Dak Lak province) said his family has 1 hectare of coffee with an output of about 3.5 tons of green coffee. Last March, when the price of coffee rose to 45,000 VND/kg, the family sold everything to pay off debt to buy fertilizer and pesticides. “Other households have almost sold out since the coffee price reached 40,000 – 50,000 VND/kg. To date, coffee prices have nearly doubled compared to last year’s average price but in reality farmers do not benefit. ” – Mr. Thach said.
Even though coffee prices have increased, farmers still do not benefit because they are out of stock. Photo: CAO NGUYEN
According to a coffee exporting business in Dak Lak, coffee is currently at the end of the season, so even if businesses want to buy, there is no goods to take. Faced with the sudden increase in prices, foreign partners also take small amounts of goods, waiting for prices to decrease or when the new crop is about to begin.
The leader of the Buon Ma Thuot Coffee Association explained that the record price of coffee was due to the recent crop failure and reduced output. Besides, since the beginning of the season, Robusta coffee prices have increased and consumption has been rapid, so by June 2023 the supply has begun to run out. “Coffee is at a high price but there are almost no transactions because businesses and farmers no longer have supplies” – a representative of this association informed.
According to a leader of the Department of Agriculture and Rural Development of Dak Lak province, Brazil is restricting coffee sales to the world, also contributing to pushing agricultural product prices to high levels compared to many years. However, it is necessary to be cautious when looking at prices. Because coffee prices will be very difficult to maintain at present when the new crop season begins. Farmers and businesses must be very alert because stockists when it comes to peak harvest and distribution may release goods for sale, leading to oversupply and then prices will decrease.
“The agricultural industry recommends that people not massively expand their acreage in areas that are not suitable for coffee. When replanting, it is necessary to choose new, superior varieties with high productivity to develop sustainable coffee” – this leader recommendation.
High price is not necessarily good
According to statistics from the General Department of Customs, in the first 8 months of 2023, Vietnam’s coffee exports reached approximately 1.2 million tons, worth 2.96 billion USD, down 5.4% in volume but increasing. 3.1% in value compared to the same period last year. During this period, the average export coffee price reached 2,463 USD/ton, up 8.9% over the same period last year.
However, in August alone, Vietnam’s coffee exports reached a low level, only 84,650 tons, worth 258.47 million USD, down 22.3% in volume compared to July and down 25.1% compared to July. with the same period last year.
According to the Import-Export Department (Ministry of Industry and Trade), in August 2023, Vietnam’s coffee exports decreased for the 5th consecutive month, to the lowest level since November 2020 (Vietnam’s coffee exports usually increase). high after the peak harvest period in December and January, February, March every year – PV). However, in August, Vietnam’s average coffee export price recorded a record high of 3,054 USD/ton, up 8% compared to July and up 29.7% compared to August 2022.
Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee – Cocoa Association (VICOFA), said that in nearly 30 years of the coffee export industry, prices have never been as high as this year when the domestic price once recorded the 71,000 mark. VND/kg (in 2011 – the golden age of coffee, the price was only 50,000 VND/kg).
Never in August has Vietnam’s coffee supply run out. “People in the profession are also surprised because Vietnam’s actual coffee output this year is much less than forecast. This causes the amount of coffee exported at the end of the season to be in short supply compared to every year” – VICOFA Chairman said. .
Also according to VICOFA Chairman, rising coffee prices do not necessarily benefit businesses as many businesses have pre-sold at the beginning of the season when prices are still low, not to mention some businesses have signed pre-sale contracts at low prices. When purchasing goods, the market price increases lead to losses. Coffee price increases also cause businesses to spend more capital, while capital is a weakness of Vietnamese businesses, especially when compared to foreign corporations.
However, Mr. Tran Duc Nhat, Vice Chairman of Buon Ma Thuot City People’s Committee, said that rising coffee prices will create a morale boost for farmers and businesses in the area. Coffee is still the main local agricultural product, bringing stable income to farmers.
“The People’s Committee of Buon Ma Thuot City is building a “Coffee City of the World” so it requires businesses and farmers to ensure the quality of coffee on the market” – Mr. Nhat emphasized.
Dak Lak province currently has more than 212,000 hectares of coffee, with an output of more than 550,000 tons, accounting for 1/3 of the country’s total coffee output. However, the organization of coffee production in Dak Lak is still fragmented, and the infrastructure for production is increasingly degraded and lacking in uniformity. Coffee has few geographical indications, and advertising and trade promotion activities have not been given due attention. Along with that, difficulties in getting bank loans, fluctuations in input material prices, and increased transportation costs have directly affected the profits of coffee producers.
