(HSV VIETNAM GROUP) – The price of green coffee is now 91,200 VND per kg, up 12% in just the first 10 days of March and up 30% compared to the previous two months.
Records in coffee capitals show that in the first 8 days of March, the price of green coffee continuously increased, sometimes reaching a record of 92,000 VND per kg, 10,000 VND (about 12%) higher than the end of February. Closing the session on March 11, coffee prices reached an average of 91,200 VND per kg.
On the coffee business forum, growers and traders said they were quite surprised by the sudden increase in the price of this commodity. At the end of December 2023, the price of green coffee was still around 70,000 VND per kg, now up nearly 30% compared to the end of last year.
Ms. Nguyen Hoang Yen - a coffee trader in Dak Lak - said that the 2022-2023 coffee harvest has ended since December 2023. Currently, the amount of green coffee in the population is still 30-40% but the price is continuously increasing. Previously, half of the goods at her facility were sold to export businesses. With the current continuously increasing price, she believes that coffee will reach new peaks in the near future.
According to the leader of Dak Lak Department of Agriculture and Rural Development, prices increased suddenly due to high demand in the world market. Domestic coffee prices are increasing "shockingly" following international developments over the past few days.
Specifically, the price of Robusta coffee on the London floor increased by nearly 200 USD per ton to 3,381 USD for the May delivery term. The Robusta coffee trading session on the London floor on March 10 reached a new peak, surprising the coffee business world.
Mr. Do Ha Nam, Vice President of the Vietnam Coffee - Cocoa Association (VICOFA), assessed the price of coffee traded last week as "unprecedented". According to him, the reason is the decrease in supply in the market. In Vietnam, Mr. Nam said that the supply in the population is still over 30%, however, many establishments hoard goods, causing prices to increase rapidly.
According to the association's forecast, in the 2023-2024 crop year, Vietnam's coffee output will decrease by 10% due to the effects of climate change, and farmers will switch to investing in crops with high economic efficiency such as durian and fruit trees.
Similarly, major coffee producing countries such as Brazil, Indonesia, and India are all affected by crop failure, with output decreasing by about 10-15%.
Recently, the impact of tensions in the Red Sea caused shipping prices to the US and EU to increase 3-5 times. This also causes coffee prices to increase.
VICOFA believes that by June, if major economies in the world continue to reduce interest rates, coffee exports will benefit. Because this is when roasters around the world buy inventory and demand will increase. Therefore, coffee prices are difficult to go down.
Data from the International Coffee Organization shows that Vietnam is the second country in the world in terms of coffee export market share (February 2021-January 2022 period), ranked only behind Brazil. The largest coffee region in Vietnam is Dak Lak, accounting for over 30% of output, with the brand and geographical indication "Buon Ma Thuot coffee" being present in more than 70 countries and territories.
In the first 45 days of the year, Vietnam exported nearly 295,000 tons, up 67% over the same period last year and earned 911 million USD. On average, each ton of coffee is about 3,100 USD, an increase of 43% over the same period in 2023. VICOFA forecasts that this year coffee exports could reach 4.5-5 billion USD.
Last year, Vietnam's coffee export turnover reached 4.24 billion USD, an increase of 4.6% compared to 2022 and the highest level ever.
Ha Diem HSV