On April 24, coffee prices continued to increase by 2,000 – 3,000 VND/kg and are at a new record high. Currently, the average coffee price in the Central Highlands provinces is 128,700 VND/kg, the highest price in Dak Nong and Dak Lak is 129,000 VND/kg.
Before the season, businesses forecast that the highest coffee price would be 50,000 VND/kg. But now the price is about to reach 130,000 VND/kg.
Reply VTC News , Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee and Cocoa Association, said that the main reason is that the coffee inventory output from Vietnam’s old crop is the lowest in history. In previous years, every year Vietnam had inventory of about 120,000 – 150,000 tons. However, in the 2023 crop year, inventory output is very low, only 50% of previous years.
Meanwhile, the output of the 2023 – 2024 crop year is also estimated to decrease by 10% compared to the previous crop year.
Coffee prices increased dramatically. (Illustration photo: Vietnam Coffee – Cocoa Association).
Dry weather in coffee growing areas is happening not only in Vietnam but in all coffee regions globally, due to the influence of the El Nino phenomenon. This situation has had a negative impact on coffee productivity and output, especially Robusta coffee.
In addition, according to Mr. Hai, domestic coffee prices have increased recently because in the world at this stage only Vietnam harvests. Indonesia harvests around April-May, while Brazil harvests around July.
Another reason pointed out by Mr. Nguyen Nam Hai is that political tensions in the world have pushed up shipping costs when goods have to be transported around the world. Meanwhile, more than 50% of Vietnam’s coffee output is exported to Europe.
However, Mr. Hai also commented that high coffee prices are also due to speculative factors and not entirely real products. “On the trading floor, when there are many buyers, there will be a lot of risk of virtual goods because there are many different stages and traders. Meanwhile, coffee prices depend on two exchanges: Robusta depends on the London exchange, and Arabica depends on the New York exchange. Mr. Hai explained.
Meanwhile, commenting on the increase in domestic coffee prices exceeding many people’s predictions, expert Nguyen Quang Binh warned that this situation could cause many risks and tensions in the coffee industry, causing many businesses to facing supply scarcity and financial pressure.
According to Mr. Nguyen Nhu Cuong, Director of the Department of Crop Production, Ministry of Agriculture and Rural Development, rising coffee prices will have both positive and negative sides. Positively, people who hoard coffee will benefit. The negative side belongs to processors and exporters. For example, there are previous contracts that can be signed at low prices. But currently, prices are high and supply is low, so purchasing and exporting is very difficult and profits are low.
At the end of the latest trading session, the price of Robusta coffee in London for delivery in May 2024 increased by 98 USD/ton, at 4,225 USD/ton, for delivery in July 2024, it decreased by 16 USD/ton, at 4,117 USD/ton.
Arabica coffee price for delivery in July 2024 decreased by 5.8 cents/lb, at 221.85 cents/lb, for delivery in September 2024, decreased by 5.65 cents/lb, at 220.1 cents/lb.
Coffee prices on the London floor moved in opposite directions, while Arabica decreased. Coffee on the New York floor fell due to too much short buying before
