Vietnam reduced production by nearly 7%! Continue to push up Robusta coffee prices

Recently, according to Vietnamese media reports, the Asian International Coffee Conference was held in Ho Chi Minh City, Vietnam, during which the Vietnam Coffee and Cocoa Association (VICOFA) reported that Vietnam's coffee crop output in 2024 was expected to reach 28 million bags, an increase of 1 million bags over previous forecasts, but a decrease of 5% and 7% from the previous season.

Due to coffee shortages in Brazil and Vietnam, the strength of the dollar against the Brazilian real and rising transportation costs, Robusta and Arabica coffee futures prices rose sharply at the end of December. But in early December, coffee sales in Vietnam increased, traders began to sell stocks, and exchange rate problems prompted Brazilian exporters to sell coffee at preferential rates, increasing supply, so futures prices began to fall.

But recently, even though Vietnam reported an increase in coffee production, Robusta coffee futures prices rose sharply to $4907 a tonne. Not only robusta coffee, but Arabica coffee futures also rose, rising by 3% to 315.75 cents per pound. In addition, some analysts believe that with the recent market fluctuations, the price of Robusta coffee may rise to 5000 US dollars / ton.

According to the rise in world prices, the price of coffee in Vietnam's domestic market has also rebounded, with the price of Robusta coffee in the central highlands falling to nearly 115000 dong / kg, an increase of 5000-6000 dong / kg over the previous quarter.

This has also led to an increase in coffee revenue in Vietnam. In the first 11 months of 2024, Vietnam exported nearly 1.2 million tons of coffee, with an export quota of US $4.84 billion, compared with the same period in 2023, although exports decreased by 15.4%, but income increased by 32.8%, according to the Vietnam Coffee and Cocoa Association.

However, even if the price remains high, due to large fluctuations and abnormal fluctuations, it is impossible to predict the price, resulting in traders do not dare to buy rashly, and some farmers also maintain a more cautious attitude and dare not sell coffee beans rashly. Finally, coffee export figures for November showed a decline in export volume and income for the first time compared with the same period last year.

Coffee exports fell by 47.4% and income by 0.5% compared with the same period last year.

Since the beginning of this year, Vietnam has been affected by bad weather. At the beginning of the year, Vietnam suffered a severe drought, which led to the depletion and cracking of riverbeds in many reservoirs and the shortage of groundwater resources. this has led to the withering of coffee trees and other plants and the yellowing of leaves, seriously affecting its yield.

In the second half of the year, the drought was alleviated with the arrival of the rainy season, but due to the serious damage to plants caused by the drought, the Vietnam Coffee Association believes that the yield cannot be fully recovered and will still be reduced by about 10%. And Vietnam was hit by a number of typhoons from September to October, but fortunately, the typhoon did not make direct landfall in coffee-producing areas, but brought heavy rainfall and strong winds, so production may be 5% less than in the previous quarter.

In addition, at present, the coffee industry in Vietnam still faces many challenges, the geopolitical situation is uncertain, and the continuing tension in the Red Sea has led to a rise in freight rates, which brings many difficulties and risks to local coffee enterprises, imports and exports.

For more information about coffee producing areas, please scan the code directly and follow: coffee comments.

Long press the QR code to follow: