What are the "scenarios" for the 2024 coffee crop?

Editor's note: As a top 4 coffee exporter in Vietnam and the number 1 pepper exporter to the European market, Mr. Phan Minh Thong - General Director of Phuc Sinh Joint Stock Company recently made a field trip to survey major coffee growing areas in the Central Highlands to prepare "scenarios" for the new crop. He sent Dan Viet an article recording his trip.

In January 2024, the price of raw coffee was 70 million VND/ton and has now increased to around 120 million VND/ton. Coffee prices on the London floor are crazy, Robusta coffee has never been so stable and "reigned" at such a high level for so long, even higher than Arabica by 500 USD to 1,000 USD/ton. The digital market is fierce but the Vietnamese commodity market has been stagnant for a long time because there is no more coffee to sell. It is quiet without many transactions. In the world, only Brazil trades coffee.

Normally, when the coffee season is approaching, we go on a survey trip to visit coffee fields in the Central Highlands. For over a year now, because coffee prices have reached an all-time high, most of the farmers we met are very happy. They are constantly planting new trees.

Những — Farmers tend sustainable coffee gardens 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

If you go to the Central Highlands, you will see every day farm trucks or pickup trucks carrying coffee seedlings to plant. Young coffee trees are quickly filled in the places that many gardens have neglected due to low prices in previous years. Or many plots of land, even though they have been sold to speculators, if they are found to be vacant, the old landowners will ask to rent them back to grow coffee. The high coffee prices help them to replant old gardens more easily and with much more confidence.

When we arrived at Dak R'Lap, Dak Ru (Dak Nong), the area bordering Binh Phuoc, before our eyes appeared lush green coffee fields, every branch was laden with fruit. Asked about the yield, the locals said this year was quite good.

We talked to a garden owner with 3 hectares, who expected to harvest 8 tons of raw coffee this year. This garden also intercropped durian, and thus they also had a big durian harvest this past year. This area has the earliest harvest in the Central Highlands and people here intercrop many types of trees in their gardens, such as coffee, cashew nuts, durian and pepper.

When we arrived at Nam N'rang (Dak Song district), many people were replanting coffee trees by grafting and also planting new ones with seedlings. With the new coffee variety, it only takes 2 years to have the first harvest.

Next, we went to Dak Nia area (Gia Nghia district), many gardens are expected to have good yields, about 3 tons/ha and people are also intercropping a lot. With this momentum, it is predicted that this year's coffee will be harvested at the end of November or the beginning of December.

Similarly, the coffee growing area in Quang Khe towards Lam Dong is also quite good, with an estimated yield of about 3-4 tons/ha. This area even has a better yield than the areas we surveyed before. It is expected that the new coffee crop will be harvested here at the end of November.

In general, this year's coffee crop will ripen a bit late, mostly at the end of November. We continued to Di Linh, to the areas of Dinh Trang Thuong, Lam Ha, Dan Phuong and Nam Bang, where the coffee yield is much higher, with some areas estimated at 5 tons/ha and possibly up to 6-7 tons/ha.

People are quite satisfied with the current coffee price, except that the season is a bit late, the new crop will not be available until the end of November.

It is worth mentioning that compared to previous years, the amount of pre-sold goods is not much. Perhaps the past two crop years (2022/2023 and 2023/2024) were too painful, so there are not many businesses buying in advance and suppliers selling in advance. The deposit rate is very high, previously, pre-sellers sometimes only deposited 10%, 5% or 0%, but now it is up to 25%, even 30% for pre-sale.

Every year, the deposit rate is low when selling in advance, and when the coffee price goes up, the seller breaks the commitment, causing many businesses to suffer. But this year, if they don't sell in advance and compete to sell at the same time, who knows what the price will be?

We have noticed that the coffee market has been volatile over the past two years, with one surprise after another, causing almost all coffee suppliers to face difficulties. It is estimated that more than 60% cannot continue their business, so caution is extremely necessary.

This year is also the year that Europe implemented many new regulations on imported goods, including the EUDR (European Union Deforestation Regulation) applied to Vietnamese coffee. Until now, the guidelines are not really clear, companies around the world do it differently.

But I am sure of one thing, without EUDR, it would be impossible to export coffee to Europe. However, due to the extremely hot coffee market situation in the past 2 years and now there has been almost no coffee for 4 months to export, plus EUDR, the raw coffee market is more unpredictable than ever.

Anyone in the raw coffee industry will certainly not forget the busy, bustling business atmosphere of the past year. Being busy and making money for many months, now suddenly not being busy, without goods, where will the money come from to survive? Where will the money come from to pay the expenses for hundreds of thousands of workers in factories that have been around for decades?

Hopefully, the next crop will yield more, people will take better care of their coffee, and everyone will be able to sell their coffee at a good price to reinvest in their coffee gardens. When people make a profit, they can devote all their efforts and love to their coffee trees, and above all, coffee consumers around the world will have delicious coffee to drink at an affordable price.

Saigon weekend September 2024.

Source: https://danviet.vn/nhung-kich-ban-nao-ve-vu-ca-phe-2024-20241002163328779.htm