Coffee export prices forecast to increase until April 2024

According to statistics from the General Department of Customs, the average export price of Vietnamese coffee in November 2023 reached a high of 3,148 USD/ton, up 32.8% compared to November 2022. In the first 11 months of this year, the average export price of this type of bean from Vietnam is estimated at 2,570 USD/ton, up 11.9% over the same period last year.

Coffee export prices are anchored at high levels.

The Vietnam Coffee and Cocoa Association (Vicofa) forecasts that the 2023/2024 coffee crop has been through 2 months and is expected to continue to be a difficult and challenging crop for the world coffee industry. Climate change with extreme weather events will greatly affect the global coffee supply, reducing productivity, output and quality.

Vietnam is in the harvest season of the new crop year and has harvested about 50% of the country's coffee output. Some regions have harvested late due to heavy rain, so the expected output is much lower than expected.

Due to the impact of climate change and crop conversion when coffee prices have been too low in recent years, Vietnam's coffee exports in the first 11 months of 2023 decreased by nearly 13% compared to the same period in 2022. It is likely that in the whole year of 2023, Vietnam's coffee exports will decrease by nearly 15% to 1.411 million tons. Supply pressure will also help coffee export prices increase.

According to the Ministry of Agriculture and Rural Development, Vietnam's coffee area is currently at 700,000 hectares, but in reality it may only be over 600,000 hectares. Accordingly, in the 2023/2024 crop year, Vietnam's coffee output is expected to decrease slightly to around 1.6-1.7 million tons, compared to 1.78 million tons in the 2022/2023 crop year, and coffee prices will continue to increase and establish a new price level. Vietnamese coffee prices are forecast to continue to increase at least until April 2024 until Indonesia and Brazil enter the new harvest season.

In the derivatives market, according to the Vietnam Commodity Exchange (MXV), at the end of the trading session on December 6, the prices of two coffee products decreased by 4.63% for the Arabica contract in March and 0.81% for the Robusta contract in January. Inventories on the New York Intercontinental Exchange (ICE) increased again, combined with the positive supply outlook in the 2023/24 crop year, putting pressure on prices.

Coffee prices on the derivatives market fell slightly

In its closing report on December 5, ICE-US said that the amount of qualified Arabica stored there increased by 5,275 60kg bags, to 229,341 bags, temporarily escaping the lowest level in more than 24 years. Major coffee producing countries continued to send goods for certification with 19,568 bags. However, the downward trend is forecast to not last.

In the domestic market, recorded this morning (December 7), the price of green coffee beans in the Central Highlands and Southern provinces fluctuated between 59,900 - 60,500 VND/kg, an increase of 800 VND/kg compared to the previous day.

In 2023, in the domestic market, there was a time when coffee prices increased to nearly 70,000 VND/kg, and it is forecasted that the next crop may increase further because of the shortage of supply.

Vicofa recommends that coffee prices will increase even more if farmers pay attention to the quality of raw coffee beans. To get the best quality coffee beans, coffee must be picked when ripe. When the coffee fruit is ripe, its weight will increase by 10%. This will help increase coffee output and improve coffee quality during processing, Mr. Nam emphasized.

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