Many countries rushed to buy Vietnamese coffee, this continent alone spent 2 billion USD.

At the end of the 2023-2024 crop year, Vietnam exported a total of 1.47 million tons of coffee, down 11.3% compared to the previous crop year. However, the export turnover value in the last crop year still increased by 33%, reaching 5.42 billion USD - the highest in history, of which 2 billion USD was exported to the EU.

Coffee - the agricultural product with the strongest price increase

According to the General Department of Customs, in the third quarter, Vietnam's coffee exports reached 212,926 tons, worth 1.12 billion USD, down 12.9% in volume and up 52.6% in value over the same period in 2023.

In the first 9 months of 2024, the export of this item reached 1.1 million tons, equivalent to a turnover value of more than 4.3 billion USD, down 11.7% in volume but up 38.7% in value compared to the same period last year. Although output decreased, thanks to the sharp increase in prices, coffee export turnover exceeded the 4.24 billion USD mark achieved in the whole year of 2023, and set a new record.

At the end of the 2023-2024 crop year (from October last year to September this year), Vietnam exported a total of 1.47 million tons of coffee, down 11.3% compared to the previous crop year, but the export turnover value in the crop year still increased by 33%, to 5.42 billion USD - the highest in history.

Farmers tend to a sustainable coffee garden in the raw material area system of Phuc Sinh Joint Stock Company in Nhan Dao commune, Dak R'Lap district, Dak Nong. Photo: Hoai Yen.

This growth was driven by coffee export prices that were nearly 50% higher than the previous crop year, averaging $3,673 per ton. In the third quarter alone, the average coffee export price reached $5,266 per ton, up 75.2% over the same period last year. Of which, the average coffee export price in September reached $5,469 per ton - the highest level ever.

Coffee has become the agricultural product with the strongest price increase among Vietnam's main export items. The decline in output, while the global demand for robusta coffee has increased sharply, is the factor that has caused coffee prices to continuously increase and reach a new peak in the 2023-2024 crop year. Vietnam, the world's largest producer and exporter of robusta, is said to have benefited from this trend.

According to independent analyst Nguyen Quang Binh, in recent months, many European importers have focused on buying Vietnamese coffee as the deadline for implementing the EUDR (European Union Deforestation Regulation) approaches. This has contributed to pushing Vietnamese coffee prices to the highest level in the world. Currently, coffee prices are fluctuating around VND113,000/kg in the Central Highlands market.

The Import-Export Department (Ministry of Industry and Trade) said that the European Union (EU) is Vietnam's largest coffee market, accounting for about 38% of the country's total annual coffee exports. In the top 10 markets importing the most coffee from Vietnam, there are 5 EU countries.

Specifically, in the 2023-2024 crop year, with a volume of 562,601 tons, worth 2 billion USD, compared to the previous crop year, a decrease of 8.6% in volume but an increase of 41.1% in turnover, accounting for 38.1% in volume and 37% in total coffee export turnover of Vietnam.

Germany, Italy and Spain were the three largest export markets, with turnover reaching 607.1 million USD, 416.6 million USD and 412.6 million USD respectively, up 37.1%, 29.6% and 74.6% over the previous crop year.

Vietnam is starting to harvest the new coffee crop. Photo: IT

In addition, exports to the next largest market, Japan, also increased by 38.4% in value despite a 0.3% decrease in volume; Russia increased by 20% in value despite a 20.3% decrease in volume. Notably, coffee exports to many markets in the Asian region such as the Philippines, China, Indonesia, Malaysia, etc. increased sharply in both volume and value compared to the previous crop year.

What is the forecast for coffee prices when Vietnam harvests the new crop?

Major coffee growing regions in Vietnam have begun harvesting coffee in the fourth quarter. The output from the new crop is expected to help quench the “thirst” for raw coffee in export markets and coffee prices will gradually decrease. However, businesses believe that the 2024-2025 crop year will continue to record a decrease in output and next year's shortage may come earlier.

Another factor indirectly supporting domestic coffee prices comes from positive factors in the world market. According to brokerage Hedgepoint Global Markets, Brazilian farmers are delaying the sale of robusta coffee in anticipation of further price increases. Brazil has sold a record amount of robusta this year due to a shortage of supply from Vietnam.

Previously, Indonesia, the world’s third largest producer of robusta coffee, also reduced its coffee supply to the market in anticipation of higher prices. In addition, the Fed’s interest rate cut will stimulate hedge funds to buy coffee on the exchanges, thereby pushing up global and domestic coffee prices.

Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association, said that harsh climate conditions and increasingly narrowing coffee growing areas have reduced the country's harvest output by about 10-15% in the 2023-2024 crop year.

“The drought has caused the trees to produce fewer and smaller beans. In addition, the rain will prevent farmers from harvesting and drying the coffee, and transportation will also become more difficult,” said Mr. Minh. In fact, in recent years, farmers have converted part of their coffee growing area to “hot” crops such as durian and avocado, etc. This has caused the coffee growing area to decrease compared to before.

Groundwater availability and reduced shade also pose long-term challenges, as many Vietnamese farmers rely on wells for irrigation and forests to help reduce evaporation, according to a USDA report. Vietnam’s coffee-growing regions experienced wet weather in August, but heavy rains following Typhoon Yagi’s landfall in the north in early September further flooded coffee plantations.

The Vietnam Coffee and Cocoa Association expects the new crop's coffee output to reach about 1.47 million tons, down from the previous crop due to unfavorable weather, but exports could reach $5-6 billion thanks to high prices.

Source: https://danviet.vn/nhieu-nuoc-do-xo-mua-ca-phe-cua-viet-nam-rieng-mot-chau-luc-nay-da-bo-ra-2-ty-usd-20241118164647385.htm