Coffee roasting and grinding businesses, restaurants... have a 'headache' with coffee prices

Coffee prices at the farm gate have reached an all-time high, but many coffee shops and coffee roasting businesses are facing difficulties because they dare not increase prices for fear of turning away customers.

Coffee processing at a business - Photo: NL

According to information from many agents and gardeners, on the afternoon of December 4, coffee prices were traded at around 108,000 - 111,000 VND/kg of beans, down about 17,000 - 21,000 VND/kg compared to the end of last week. Fresh coffee prices also fell to 21,000 - 22,500 VND/kg, down 7,000 - 8,500 VND/kg.

However, this price is still nearly double the same period last year and nearly three times higher than the common level in previous years, helping coffee farmers earn a good profit. On the contrary, many coffee shops and coffee roasting businesses are facing difficulties due to high input prices but do not dare to increase prices for fear of turning away customers.

Mr. Nguyen Tan Linh, owner of Linh Rosi Coffee Shop (Phan Van Tri, Go Vap District, Ho Chi Minh City), said that the price of coffee beans purchased by the shop for self-roasting and grinding has reached VND280,000/kg, an increase of VND90,000/kg compared to the beginning of the year and nearly double compared to last year. "The price of raw coffee has increased so much, but I only dare to increase the selling price slightly to retain customers," Mr. Linh said.

Many shop owners said they did not dare to increase the price of coffee as much as the price of coffee beans, and if they increased, it would only be about 5,000 - 6,000 VND/cup because they were afraid that customers would turn away. Not only did the price of coffee beans increase, many other costs such as premises, labor, etc. also increased, causing headaches for shop owners.

"Instead of increasing the price according to the cost of raw materials, we only increase the price slightly and reduce the amount of coffee in a cup compared to normal, even mixing in other ingredients to reduce costs. That way, we can keep customers and I can also make a profit, albeit a modest one," said the owner of a coffee shop. Meanwhile, many stores and large beverage brand systems also said they did not dare to increase the price of coffee for fear of turning away customers.

Many coffee processing enterprises also said they are having a headache with the price of raw coffee. Talking to Tuoi Tre on December 1, Mr. Nguyen Ngoc Luan - Director of Global Trade Linkage Company (HCMC) - said that the price of good quality raw coffee (coffee beans) purchased by the unit is 180,000 VND/kg, a sharp increase compared to the beginning of the year, nearly double the average level last year, causing many difficulties in production.

Meanwhile, according to the contract commitment, the export price of coffee cannot increase by more than 4-5%, so businesses are still "struggling". "Compared to the beginning of the year, we only adjusted the price up 5% for old customers and 10% for new customers," said Mr. Luan.

Coffee prices are high but hard to buy

According to processing enterprises, each kilogram of raw coffee will produce 700 grams of finished roasted and ground coffee. "With the current price of coffee beans, each kilogram of ground coffee must be sold for about 500,000 VND/kg for the good type and 300,000 - 350,000 VND/kg for the basic type, then the seller will make a small profit" - Mr. Dang Van Quan, representative of a coffee production enterprise in Ho Chi Minh City, said.

However, due to weak demand, it is not possible to increase the selling price as expected, but only dare to increase it enough to keep customers and find every possible solution to cut costs to survive. Not only having a headache with the high price of raw coffee, many businesses said that buying raw coffee is not easy because many businesses compete to buy, even buying coffee left on the tree due to concerns that the price of coffee will continue to increase.

Source: https://tuoitre.vn/doanh-nghiep-rang-xay-hang-quan-dau-dau-voi-gia-ca-phe-20241204225059047.htm