Vietnamese coffee is in constant trouble! It will be possible to reduce planting area in the future

At present, the market price of Robusta coffee varieties, which Vietnam mainly exports, remains high. Although the Robusta coffee futures price has fallen, it still remains at US$4000/ton. This is mainly due to the reduction in output caused by many problems encountered by the Vietnamese coffee industry.

In fact, as international coffee prices have continued to rise in recent years, many local coffee farmers in Vietnam have also planned to expand their planting area. However, this year's El Niño phenomenon has caused Vietnam to encounter extreme weather such as high temperatures, drought and lack of rain, making local coffee planting face quite difficult situation.

In March and April this year, Vietnam has already encountered drought problems. Drought has caused the river beds of many reservoirs to be depleted and cracked, and groundwater resources are insufficient, causing coffee trees and other plants to wither and yellowing of leaves.

However, in May, Vietnam entered the rainy season, but the rainfall was still not enough to solve the drought problem. According to the local meteorological department, in May and now in June, the rainfall in Vietnam's main coffee-producing area, Kalai Province, received only 10-15 millimeters, which is not effective in alleviating the drought. In addition, most of the time it is just showers.

However, local farmers can only reduce the impact of extreme weather on coffee plants through extensive irrigation and other methods, but the results are minimal. In addition, local farmers said that the coffee trees grown in Vietnam are sensitive to temperature and grow well at temperatures of 24-28℃, but the current temperature is high, between 25-35℃, which leads to a decrease in yield and the quality of flowers and fruits. The quality of coffee has declined. In addition, when temperatures are higher, pests and diseases are also very easy to spread.

Therefore, according to Vietnam customs data, in May 2024, Vietnam exported 79358 tons of coffee, a decrease of 47.8% from the previous month. In the first five months of this year, Vietnam exported a total of 817514 tons of coffee, which is a decrease of 5.8% from the same period last year.

The decline in exports has kept Robusta coffee prices high. According to some coffee brands, some merchants have to go to Indonesia to buy coffee, but not much because Indonesian coffee prices are also high. In the end, many coffee brands now have to choose to increase prices.

However, in addition to the high price of coffee beans, the price of pepper is also rising. It is reported that in the first five months of 2024, Vietnam's export volume of various pepper reached 114,400 tons. Although it dropped by 13.2% year-on-year, the export volume of pepper reached US$493 million, a year-on-year increase of 20.6%. Among them, the average export price of black pepper was US$4197/ton, and the average export price of white pepper reached US$5804/ton, up US$754 and US$849 respectively.

Vietnam is the world's largest pepper exporter. Although production cuts are also due to weather conditions, these high-value crops are obviously more attractive to farmers due to limited market supply and high prices, which may reduce the coffee planting area in Vietnam in the future.