(HSV VIETNAM GROUP) – Despite drought and increasingly severe climate change, Vietnamese rice prices have returned to the race for the highest position in the world. Prices of a series of other agricultural products such as pepper and coffee are also at their peak. Prices of durian, coffee, pepper... are at their peak.
In April, the intense heat all over the world also pushed the coffee price fever to an unprecedented high in this industry. On April 25, the price of robusta coffee on the London floor (UK) reached 4,532 USD/ton, a historic milestone. In Vietnam, the price of green coffee reached 135,000 VND/kg, 2.5 times higher than the same period last year. Coffee exports in April reached output of 148,000 tons, turnover of 572 million USD; Although output decreased by 9.5%, turnover increased by more than 42%. Bringing total exports in the first 4 months of the year to 726,000 tons and turnover of 2.5 billion USD, volume only increased by 1% but value increased by 40%.
Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee - Cocoa Association (VICOFA), said: "In the early days of May, although world and domestic coffee prices decreased rapidly, they still maintained a high level. This price decrease is not too surprising because Brazil - the world's largest coffee supply begins the harvest. Every year in May the price will decrease. This year the price has risen too high so a sharp decrease is normal. People in the industry still joke, but The seasonal rains that have appeared more frequently in the Central Highlands in recent days also contribute to "cooling down the price fever" of coffee in the sense that with water for irrigation, the price will be more reasonable.
"However, the general trend of the global market this year and the next crop year is still that supply is lower than demand, prices remain high. We should be calm about short-term market developments. In addition, VICOFA also recommends that the agricultural industry should re-investigate the area of Vietnamese coffee and provide accurate numbers to the business community so that we can have a more appropriate business strategy," Mr. Nguyen Nam Hai suggested.
Similarly, even though the whole country is facing harsh dry weather, the fruit and vegetable export industry is still surpassing all records. In the early days of May, the amount of goods circulating through northern border gates was still extremely bustling.
Talking about the leap forward in the fruit and vegetable industry, Mr. Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association (Vinafruit), shared: "It is true that this year's weather is fiercely dry, but fruit growing areas have been able to "avoid" it. The first off-season durian harvest in the West took place in January - February at the beginning of the year when the weather was still cool. By the time the heat and drought increased, the harvest was basically completed. Commodities affected by drought The most common is off-season dragon fruit in Binh Thuan. There are many gardens that lack irrigation water, and the yield area has decreased, but in return the selling price has increased 3 times higher, so both export turnover and farmers' income are still guaranteed.
Pepper is also one of the hot items recently. In the first 4 months of 2024, pepper exports reached 83,783 tons, with a turnover of more than 353 million USD, down 18.3% in volume, but up 11.5% in turnover compared to the same period in 2023. The average export price of pepper reached 4,214 USD/ton, up 36.4% over the same period last year.
Ms. Hoang Thi Lien, President of the Vietnam Pepper and Spice Association, compared: A year ago, the price of pepper was 67,000 VND/kg but now it has increased to over 100,000 VND/kg, equivalent to an increase of over 44%. One of the main reasons driving up pepper prices is limited supply worldwide, not just Vietnam. "I surveyed many pepper growing areas and people thought that currently there are many other crops with higher economic value, so pepper prices must be high for them to continue growing them. It is forecasted that in the coming time, prices will continue to increase, which will help the pepper industry reach the 1 billion USD export mark this year," Ms. Lien said.
Mr. Nguyen Nhu Cuong, Director of the Department of Crop Production (Ministry of Agriculture and Rural Development), commented: Like many other Southeast Asian countries, Vietnam is severely affected by heat waves leading to drought and especially saltwater intrusion in the Mekong Delta. However, it is important that we proactively respond so we are not surprised or severely damaged. First, the rice granary of the Mekong Delta often suffers from drought and saltwater intrusion, some years are severe, even especially severe, so we basically have experience in dealing with it.
Second, a fairly strong El Nino situation was predicted early, so right from mid-2023, the Department of Crop Production advised the Ministry to develop response plans and adjust the seasonal calendar to avoid salinity drought from May 22, 2023. Up to this point, the winter-spring rice crop has been harvested and has basically not been affected or damaged. A small part of the summer-autumn crop is outside the general production plan so it is affected, the quantity is insignificant.
However, the Department is also reviewing the damage situation and making new plans for the next phase. In 2024, the basic production area will be about 7.09 million hectares, the output is estimated to reach 43 million tons of rice, ensuring food security and the amount of rice exported will be about 8 million tons.
For other crops, especially long-term crops like coffee, the peak heat period is also when the plants are flowering. As a result, this year's output may be significantly affected, with some gardens suffering serious damage. The situation is similar for pepper plants. Local specialized agencies are also reviewing to understand the situation and deploy appropriate solutions.
"Unfavorable weather affects the agricultural production of Vietnam and other countries. This will cause limited global supply, increased demand and pushed up prices. However, currently, because we are proactive in responding and farmers have a lot of experience, the level of damage is not significant. This creates conditions to help Vietnam maintain good output for export, meeting the world's needs," said Mr. Nguyen Nhu Cuong.
According to Professor Vo Tong Xuan, the successful avoidance of drought and saltwater intrusion is due to the fact that Vietnam has many rice varieties of good quality, especially short-term, high-yield rice varieties. Therefore, we can easily and flexibly adjust the seasonal schedule. Besides, the quality of Vietnam's rice meets the needs of the market well in a wide segment, so there are many customers from all over the world. Countries with high demand such as the Philippines, Indonesia, Malaysia, China or African countries... love it very much. This helps us access the market easily. Vietnam has invested in infrastructure for the rice production sector quite completely; Farmers are good and experienced so they can easily overcome weather obstacles.
Ha Diem HSV