Previously, the price of Robusta coffee was often only 1/3 to 1/2 of Arabica coffee. Explaining this phenomenon, Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee and Cocoa Association (VICOFA), said that the main reason was the sharp decrease in the supply of Robusta coffee due to the impact of climate change.
“The sharp increase in Robusta coffee prices is mainly due to fluctuations in supply and demand. Climate change has affected all types of coffee, but most of all Robusta coffee beans, which are produced in large quantities in Asian countries such as Vietnam, Malaysia, Indonesia, etc. The sharp decrease in the production of this type of coffee has caused prices to increase rapidly,” Mr. Hai analyzed.
For the first time, the export price of Robusta coffee has surpassed the price of Abarica coffee. (Illustration: Ethnic and Development Newspaper)
According to Mr. Hai, in addition to the sharp decrease in output, the demand for Robusta coffee beans in the world has also increased, causing the price of Robusta to increase higher than that of Abarica in the Vietnamese coffee market – something that has never happened before.
“The world’s demand for Robusta coffee is increasing, this is due to the increased demand for instant coffee. Developed countries such as Korea, Japan… have consumed a lot of instant coffee in recent years. Meanwhile, instant coffee mainly uses Robusta beans as raw material because of its stronger flavor.” Mr. Hai said.
The Chairman of VICOFA also stated that the high price of Robusta coffee brings great benefits to Vietnam’s coffee consumption. Because up to 94% of Vietnam’s coffee growing area grows this variety. In fact, it can be seen that Vietnam’s export turnover in the first 8 months of the year, although decreasing in quantity, increased in value significantly compared to the same period of previous years. Specifically, according to the General Statistics Office, Vietnam’s coffee export after 8 months reached 1.052 million tons, with a turnover of 3.99 billion USD, down 12.5% in volume but up 34.8% in value compared to the same period last year.
In the first half of September, Vietnam’s main export was still Robusta coffee with 15,155 tons, average price of 5,053 USD/ton, bringing in 76.583 million USD. Arabica coffee was exported 1,129 tons, average price of 4,166 USD/ton, bringing in 4.705 million USD. Thus, the export price of Vietnam’s Robusta coffee exceeded the price of Arabica coffee by 887 USD/ton.
The export price of Robusta coffee was first recorded to be higher than that of Arabica coffee in May with a gap of 32 USD/ton (Robusta coffee beans 3,920 USD/ton and Arabica coffee 3,888 USD/ton). The gap then widened as the price increase of Robusta coffee was stronger.
Economists explain that previously, Robusta coffee prices were only about one-third of Arabica coffee prices. Due to the low price of Robusta coffee and the improving quality, roasters around the world have increased their usage rate, causing demand to increase. Meanwhile, Robusta coffee production has decreased due to weather effects and farmers switching crops after a long period of low coffee prices, causing the coffee growing area to shrink.
Currently in Vietnam, coffee is preparing to enter a new harvest season. Mr. Nguyen Nam Hai recommends that people should prepare processing, drying and drying facilities well to ensure that coffee beans are preserved in the best way in case of adverse weather. “Usually, Vietnam will harvest coffee in November and December. If it is sunny at this time, the harvest will be very favorable. However, if it rains, with such a large harvest, the conditions of our drying facilities are not enough to meet the demand, which will be very dangerous. The quality of coffee beans will decrease, and export output may decrease sharply.” Mr. Hai emphasized.
In the world market, in the trading session last week, the price of Robusta coffee on the London floor for November delivery was at 5,059 USD/ton, down 427 USD/ton compared to the peak set in the trading session on September 16 (5,486 USD/ton). The main reason was that investors took profits after the price of this agricultural product increased too quickly in a short period of time.
