Coffee Price “Pumped Up” To Nearly 92 Million VND/ton, Mr. Dang Le Nguyen Vu’s Trung Nguyen And A Series Of Businesses Face Unprecedented Circumstances

Instead of buying land, if this time last year an investor had chosen coffee, his assets would have doubled. Coffee prices have increased continuously since the beginning of the year until now, and compared to the same period last year, coffee prices have doubled.

The peak was on March 8, 2024, when the domestic coffee price increased by 1,700 VND to the price threshold of 90,400–91,800 VND/kg. This is the highest price ever.

Coffee prices in the Central Highlands provinces on March 8 continued to increase dramatically, jumping from 1,400 to 1,700 VND/kg, trading at an unprecedented high in the range of 90,400 to 91,800 VND/kg. Coffee in the domestic market of Vietnam is currently very difficult to buy; traders have to push prices up very high to buy goods.

Today (March 11), we witnessed a contrast in the world market when trading coffee prices decreased for both Robusta and Arabica. Meanwhile, coffee prices in the domestic market still increased by 600–700 VND/kg. Previously, raw coffee prices had continuously increased for a while due to concerns about a lack of supply in coffee-growing countries around the world.

Robusta coffee prices skyrocketed due to concerns about a decline in Asian supply. Indonesia reported a 79.73% decrease in January exports over the same period, bringing exports for the first 10 months of the current coffee season (from April 2023 to March 2024) to a total of only 1,935.960 bags, a decrease of 2,687,457 bags, or a decrease of 60.72% compared to the same period last crop year.

In Vietnam, prolonged hot weather in key coffee-growing areas is causing the world market to worry about the prospect of a new crop of coffee. Exporters are having difficulty purchasing coffee in Vietnam; some farmers are waiting for prices to increase, while shipments to Europe are delayed by the conflict in the Red Sea, contributing to limited supply.

The General Statistics Office of Vietnam estimates that coffee exports in February will only reach 160 thousand tons, down nearly 20% over the same period, due to the extended Lunar New Year holiday in the year of the dragon. The Vietnam Coffee and Cocoa Association (Vicofa) estimates that the current 2023–2024 crop production will decrease by another 10% compared to the previous crop.

While the price of coffee in Vietnam’s domestic market is currently very difficult to buy, traders have to push the price up very high, adding 220–280 USD/ton compared to the futures price to buy goods.

Many farmers in coffee-growing areas expressed regret for selling early and did not expect coffee prices to increase so sharply. Mr. Hung (Buon Ma Thuot, Dak Lak) said that coffee prices are currently high, so farmers who still have coffee will not sell it if they do not need money because they hope the price will continue to increase.

Vnexpress newspaper quoted Mr. Do Ha Nam, Vice President of the Vietnam Coffee and Cocoa Association (VICOFA), as assessing the price of coffee traded last week as “unprecedented.” According to him, the reason is the decrease in supply in the market. In Vietnam, Mr. Nam said that the supply in the population is still over 30%; however, many establishments hoard goods, causing prices to increase rapidly.

Source: Tincaphe.com