Coffee review

Defeated by durian! Vietnam's coffee planting area declines

Published: 2024-07-21 Author:
Last Updated: 2024/07/21, Earlier, Vietnam's Ministry of Agriculture and Rural Development issued an export report for the first half of 2024, which pointed out that coffee exports in the first six months of 2024 fell by 10.5%, with an export volume of 902,000 tons of coffee. However, due to the average export price of coffee increased by 50.4%, exports reached 3.22 billion US dollars.

Earlier, the Ministry of Agriculture and Rural Development of Vietnam issued an export report for the first half of 2024, which pointed out that coffee exports fell by 10.5 per cent in the first six months of 2024, with exports of 902000 tons of coffee, but due to a 50.4 per cent increase in the average export price of coffee, exports reached US $3.22 billion, an increase of 34.6 per cent.

The decline in exports was mainly due to a decline in coffee production, which was mainly due to the irreparable damage to coffee trees caused by dry weather in Vietnam in the first half of the year. Secondly, due to the competition of other fruits, the planting area of coffee has been reduced, and finally the production has been greatly reduced, and the market is in short supply.

Recently, the Vietnamese Presidential Planning Bureau said that at present, the area of the national fruit tree group reached 12.711 million hectares, an increase of 2.6 percent compared with the end of June 2023, of which durian reached 1.539 million hectares, up 17.4 percent, passion fruit reached 126000 hectares, an increase of 9.3 percent. Guava reached 272000 hectares, an increase of 5.6%. For growing coffee and pepper, growing fruit is more profitable, so people will switch to fruit trees, and the planting area for coffee and pepper will be reduced.

Recently, the general manager of Simexco Daklak, Vietnam's third largest coffee exporter, said in an interview with the media that before, the prices of robusta coffee and pepper were relatively low, so many people chose to cut down these trees and plant fruits such as durian. But also because the production of coffee and pepper is reduced, supply exceeds demand, and prices also rise.

And because there is less and less agricultural land, but the global population is still growing, the demand for pepper and coffee is increasing. Although the prices of coffee and pepper have risen to high levels, with pepper reaching 100000 dong / kg and raw coffee beans reaching 120000 dong / kg, it is still not enough to attract people to replant, compared with the profits of other crops such as durian. Coffee and pepper income is still much lower.

Due to weather effects such as drought in the first half of the year, stocks of coffee and pepper are expected to continue to decline in the next 3-5 years, and market prices for coffee and pepper are unlikely to fall further in the long run.

At present, Vietnam's domestic coffee market is not optimistic. According to Vietnamese local traders, the spot trade of Vietnamese coffee is in the doldrums. At present, the spot purchase price of coffee is at a high price of 117 million to 120 million dong / ton. but many farmers have sold out of coffee beans, and some companies have bought coffee beans at high prices in order to deliver the contracts previously signed. But now after the delivery is completed, we are not willing to buy coffee beans at too high a price.

However, there is good news that South Korea will increase its imports of Vietnamese coffee. It is reported that there are four new low-cost coffee shops in South Korea every three days, which is very popular because the price of each cup of coffee is about 1500 won (7.89 yuan), which also makes these coffee brands grow rapidly.

Due to its geographical proximity, South Korea will increase its imports of Vietnamese coffee. In 2023, South Korea imported 41450 tons of Vietnamese coffee at an export price of US $93.35 million, an increase of 17.9% compared with 2022, and the export value is expected to reach US $2.2 billion in 2024.