08:30, 12/06/2023
At nearly 65,000 VND/kg (on June 11, 2023), coffee prices have set a record high in the past 15 years. Although not many farmers are benefiting from high prices at this time, this is also a good sign to attract farmers to return to their gardens after many years of struggling due to low prices.
Price increase beyond expectation
According to the Ministry of Industry and Trade, for over a month now, Robusta coffee prices in the domestic market have increased sharply compared to the first months of the year. Currently, coffee prices in the Central Highlands provinces are fluctuating between 64,100 - 64,900 VND/kg. This is considered the highest coffee price in the past 15 years.
Ms. Luong Thi Oanh, Director of Ea Wy Agricultural Production Cooperative (Ea H'leo district) said that when the price increased to 40,000 VND/kg, members sold 70% of their output (245 tons), because coffee prices had been at this level for quite a while, so people thought they would not increase any more, so they quickly sold them; a few sold at 50,000 VND/kg, and when the coffee price reached 60,000 VND/kg, only 5-6 tons benefited from this price. Ea Wy Agricultural Production Cooperative has 110 hectares of coffee, with an output of 350 tons, and currently has no more coffee beans to sell. All members of the cooperative are very sorry because no one expected the coffee price to increase to this level.
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| Coffee harvesting at Ea Wy Agricultural Production Cooperative (Ea H'leo district). |
According to Dak Lak 2-9 Import-Export Company Limited (Simexco Dak Lak), the company predicted that coffee prices would increase to a record level of 56,000 VND/kg of green coffee beans in the past 15 years, but the current price increase was unforeseeable. At this time, there is almost no coffee left in the market, businesses are under financial pressure to buy and sell as much as they can, few businesses still have stock to sell.
According to the Center for Digital Transformation and Agricultural Statistics (Ministry of Agriculture and Rural Development), the average export price of coffee in the first 5 months of 2023 is estimated at 2,295 USD/ton, up 2.4% over the same period in 2022. Coffee exports in the first 5 months of 2023 reached 882,000 tons with a value of 2.02 billion USD, down 2.2% in volume but up 0.2% in value over the same period last year. It is forecasted that in the last months of the year, the export value will be even higher when contracts at new prices are awarded. |
Economists say that one of the reasons for the high coffee prices is primarily due to supply not meeting demand. Currently, the supply of Robusta in the world's leading producing countries is shrinking due to crop failure, even in Vietnam, at the end of the 2021-2022 crop year, the output is forecast to be 10-15% lower. For a coffee producing powerhouse like Vietnam, a 10-15% output shortfall is huge, affecting supply and demand as well as global coffee prices. In addition, with economic recession and inflation occurring in most countries around the world, consumers are switching to lower-priced coffee compared to Arabica, roasters are forced to respond to this trend and they buy more Robusta to blend with Arabica to lower coffee prices.
Pulling farmers to stick with the garden
Dak Lak currently has 213,336 hectares of coffee, with an output of over 526,700 tons/year, of which over 10% of the coffee production area is concentrated in specialized areas, the remaining nearly 90% of the area is grown, cared for and managed by farmers themselves. Currently, the province has 39 cooperative groups and 53 agricultural cooperatives in the field of coffee production. Coffee production cooperatives that operate quite effectively have linked coffee-growing households and reorganized production in a sustainable direction, with certification, actively applying science and technology to production, linking with businesses... contributing to creating coffee products with high quality and economic value on the market.
However, in reality, there are still many households' orchards that have been neglected due to low product prices for too long, while the high price of agricultural materials has caused farmers to invest in poor care and limited replanting... The high price of coffee has encouraged some farmers to start replanting coffee gardens in old areas and start focusing on investing in and taking good care of the gardens...
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| Members of the Ea Tu Fair Agriculture and Service Cooperative (Buon Ma Thuot City) take care of their garden in a sustainable way. |
According to Ms. Luong Thi Oanh, Director of Ea Wy Agricultural Production Cooperative, the high price of coffee has encouraged farmers to confidently stick with this crop and this is also an opportunity for farmers to get rich. Currently, the Cooperative is still maintaining the stability of the garden, advising farmers not to expand the area but to focus on improving the quality of the garden by producing according to VietGAP, organic and other international certifications.
At the same time, the cooperative has added more machinery to improve the quality of processing according to the process of specialty coffee and high-quality coffee. Last year, the cooperative sold 5 tons of specialty coffee, with an increase of 15,000 VND/kg. This year, the cooperative encourages farmers to increase the production of high-quality coffee. The cooperative will transfer the technology to members for self-processing or the cooperative will purchase 100% ripe fruit for processing and find orders with good prices to create a stable output for this type of coffee, as well as bring the best profits to farmers.
Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association, said: The increase in coffee prices has also helped farmers benefit and people feel more secure in taking better care of their gardens. The increase in coffee prices will make farmers think about not destroying their coffee gardens to plant high-value fruit trees but only intercropping them in the direction of landscape coffee to help the gardens develop sustainably and meet the requirements of importing countries. However, localities also need to strengthen communication work so that people do not increase the area but focus on taking good care of their gardens.
Minh Thuan
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