Special vintage of Vietnamese coffee

There are many unexpected factors in the market

The 2023 – 2024 coffee crop is extended from October last year to September this year. The global coffee industry has experienced many difficulties and challenges due to climate change, which has greatly affected productivity, output and quality. Drought and heat lasted from the beginning of the season, and rain and storms at the end of the season. Political instability, war, and local embargoes between Russia and Ukraine, Israel and the Gaza Strip, and many other places in the world continue to impact the difficulties of the global economy in the Middle and East region. long term.

In Vietnam, according to the Vietnam Coffee – Cocoa Association (VICOFA), at the end of this crop year, Vietnam has exported nearly 1.45 million tons of coffee, expected to earn 5.32 billion USD – a decrease of 12,000 USD. 7% in output but up 30.4% in turnover. Coffee export turnover in the recent crop year also reached a record level for this industry ever.

Looking at each type of exported coffee, it can be seen that the majority is still Robusta coffee with an expected output of nearly 1.23 million tons, a turnover of 4.32 billion USD – a decrease of nearly 18% in output but an increase of 24% in price. thanks to increased export prices.

Notably, processed coffee (roasted and instant) was exported about 130,150 tons (not converted into green coffee), with a turnover of 898 million USD – an increase of 44.6% in volume and an increase of 76% in value. value. This shows that the coffee industry has had an increase in deeply processed products, increasing export value in addition to exporting raw materials.

Besides the record number of exports, the coffee market this crop year also has many unprecedented surprises. Mr. Do Ha Nam – Vice President of VICOFA – said that this is the first time the price of Vietnamese coffee is the most expensive in the world; The export price of Robusta coffee is higher than the price of Arabica coffee; Coffee futures prices on the London floor exceeded 5,000 USD/ton and at some times exceeded 5,500 USD/ton.

Mr. Nguyen Quang Binh – coffee market expert – commented that 2024 is considered a magical year for the coffee industry. The Vietnamese and world coffee markets witnessed an unprecedented price storm, with coffee prices increasing up to 1.5 times compared to last year.

And the story of strengthening the supply chain

The European Union’s anti-deforestation regulations (EUDR) are considered an important plus for coffee exports because the Vietnamese coffee industry is prepared to implement this regulation. According to Mr. Do Ha Nam, if this regulation is implemented as originally planned, Vietnamese coffee prices will continue to be the most expensive in the world, because Vietnam is the best source of supply in implementing this regulation.

However, the market is not all “pink”. Rising coffee prices help farmers win, but many businesses also face difficulties. Mr. Do Ha Nam analyzed that coffee prices increased too quickly while supply was limited, causing the supply chain to be disrupted. Export enterprises do not have goods delivered on time, partners, buyers, and roasters react negatively.

According to export businesses in the industry, in the past crop year, when Vietnamese coffee prices increased and purchasing businesses had no goods to deliver to roasters, some partners sought other sources of supply to maintain production. export. This means that Vietnamese coffee has lost part of the market.

Of course, buyers do not want coffee prices to go down, but it is necessary to maintain a price level where farmers have good profits and commercial enterprises and processors can also balance prices. In addition, the links in the purchasing and export chain also need solutions to maintain stability, ensuring that goods can circulate continuously.

The coffee market in 2025 is expected to have strong fluctuations due to concerns about supply, geopolitical fluctuations and strict requirements from import markets. Notably, some coffee importers said they will look for alternative sources of supply for Vietnamese coffee if the price increases too high and the supplier’s reputation is not guaranteed. This requires the coffee industry to adjust soon to get on the right trajectory and maintain sustainable growth.

Vietnamese coffee is increasingly playing an important role in world market demand. Currently, up to 40% of the area and output are certified for sustainable and organic production, which is a great competitive advantage. Besides, Vietnam is also at the forefront of implementing EUDR. However, according to Mr. Nguyen Nam Hai – Chairman of VICOFA, in the next few years, whether the world will fall into a coffee surplus crisis, causing prices to plummet like before, this is something that needs to be considered carefully. Vietnam also needs to continue to focus on improving coffee quality and harmonizing the interests of parties involved in this industry’s value chain.

Experts also said that the immediate task of the Vietnamese coffee industry is to soon resolve gaps in the supply chain and regain reputation from export partners. On the farmers’ side, priority needs to be given to improving coffee quality, avoiding massive area expansion that causes supply to exceed demand. Enterprises, in addition to purchasing and exporting raw materials, actively invest in processing and deep processing of value-added products to ensure long-term sustainable growth.

According to: Nguyen Hanh
Source: congthuong.vn