Coffee review

Vietnam Robusta coffee price remains high, but is not optimistic about the future market.

Published: 2024-07-24 Author:
Last Updated: 2024/07/24, Recently, according to the Vietnam Coffee and Cocoa Association, Vietnam's Robusta prices surged due to a decline in local production, growing demand for Robusta coffee and strong exports. The expected price of raw coffee in the Central Highland is 91 million to 93 million dong / ton, and the current spot price of coffee is constantly breaking the price discipline.

Recently, according to the Vietnam Coffee and Cocoa Association, Vietnam's Robusta prices surged due to a decline in local production, growing demand for Robusta coffee and strong exports. The expected price of raw coffee in the central highland is 91 million to 93 million dong / ton. the current spot price of coffee is constantly breaking the price record, up 49% from 46 million to 47 million dong / ton in the same period last year and 30% so far this year.

The figures indicate an increase in Vietnamese coffee exports, which fell 20 per cent in February from a year earlier to 160000 tons, according to the Vietnam Bureau of Statistics. But total coffee exports from January to February rose 16.2 per cent year-on-year to 390000 tons. Export earnings reached US $138 million, up 27.9 per cent and 85 per cent respectively over the same period last year. The largest export markets are Germany, Italy, Japan and Spain.

Some Vietnamese exporters say there is a strong global demand for Vietnamese Robusta coffee, but the supply chain has declined this year. It is mainly in terms of production, due to the drought caused by El Ni ñ o weather and a reduction in coffee acreage, Vietnam's coffee production decreased by 10% in 2023. In addition, there is a shortage of stocks, which is only 1/3 of that in previous years, which stems from last June, for the first time in history, farmers had no coffee to sell, resulting in a sharp drop in inventories. Traders and exporters have stepped up their efforts to buy coffee beans to ensure stocks, further pushing up prices, and coffee prices are expected to peak in the near future.

Moreover, industry insiders are not optimistic about the future price trend, as the market supply is expected to improve as April approaches and the harvest season for robusta coffee in Brazil and Indonesia is approaching. When the market supply returns, the price of Robusta coffee will fall, so Vietnamese experts call on growers and traders to sell their coffee as soon as possible, and call for more investment in the development of Vietnam's coffee industry.

In addition, external geopolitical problems have also been affecting coffee prices. at present, the Houthi continue to attack and conflict in the Red Sea region, and the Red Sea crisis has not eased, and continues to spill over to the Gulf of Aden, the Arabian Sea, and the Persian Gulf. The most serious impact is the route from Europe to the far East and parts of the east coast of the United States to Asia, so shipping companies can only choose to detour the Cape of good Hope. But there are problems such as increased fuel consumption, rising costs, transportation time, and risks such as seafarers' strikes.

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