From the beginning of the year to the end of August 2022, coffee exports brought in 2.8 billion USD, up 40% in value compared to the same period last year. The Coffee – Cocoa Association (Vicofa) forecasts that if the export price of coffee remains at the same high level as in the first half of the year, then the whole 2022 Vietnamese coffee industry will set an export record of 4 billion USD…
Exported coffee is having good prices. (Photo: Internet)
According to the data of the General Department of Customs, in August 2022, Vietnam exported 112,531 tonnes of coffee with a turnover of 266 million USD, down 4% in quantity but up 13% in turnover compared to August 2021.
The average export price of Vietnamese coffee in August 2022 is estimated at USD 2,336/tonne, up 1.6% compared to July 2022 and 16.1% compared to August 2021. Overall, in August 2022, the average export price of Vietnamese coffee was estimated at 2,268 USD/tonne, up 21.7% compared to the same period in 2021.
GERMANY IS THE LARGEST COFFEE CONSUMER MARKET
Due to concerns of supply shortage, coffee prices in both domestic and global markets have risen to record levels. According to the International Coffee Organization (ICO), in August 2022, the global coffee price index rose 4.9% over the previous month, to an average of 200.1 cents per pound.
Of which, Robusta coffee price rose the strongest by 9.2%, Colombian Arabica and other Arabica coffee prices also increased by 3.4% and 4.9% respectively. Coffee prices increased again in the context of sharp declines in global coffee inventories. Bloomberg said that Vietnam’s coffee inventory is declining and this is an indication that the price of this commodity globally could rise even further in the upcoming time.
“Cumulatively in August 2022, Vietnam exported 1.2 million tonnes of coffee, bringing the turnover of 2.8 billion USD, respectively 11% in quantity and 40% in value compared to the same period last year”.
According to the General Customs Department.
Notably, regarding Vietnam’s coffee exports in the first 8 months of 2022, Germany is Vietnam’s largest coffee consumer market, with a turnover of 341 million USD, accounting for 12% of the total export turnover, up 20.8% compared to the same period in 2021; respectively, accounting for 12% of Vietnam’s coffee total export turnover.
Next is the Belgian market, reaching 213 million USD, growing by 220%; the Italian market reached 209 million USD, growing by 32%… Exports to Mexico in August 2022 also recorded growth of more than 59 times over the same period in 2021, from 0.7 million USD to 41.4 million USD. Meanwhile, Robusta coffee exports to some markets decreased in quantity, such as Japan, Angieri, South Korea, and China.
Regarding types, Robusta is the largest export item, accounting for 78% of the turnover and 91% of Vietnam’s coffee exports; growing by 20.1% in terms of export volume and 48.7% in turnover value.
Regarding the coffee market in the last 4 months of the year, experts forecast that the global price of coffee will continue to rise in the coming time, due to concerns of supply shortage, which will help the price of coffee rise.
According to Bloomberg’s survey, global coffee reserves are forecast to halve by the end of September 2022 compared to the same period in 2021. Vietnam’s coffee production is also expected to decrease by 6% to 1.72 million tonnes in the 2022-2023 period. Meanwhile, Safras & Mercados, Analyst – Consultant, said that Brazilian coffee production this year will not reach the forecast of 61.1 million bags due to last year’s frosts and droughts.
Estimates of some enterprises show that inventories as of the end of September 2022 may be only half of the same period last year. Vietnam’s Robusta coffee production is expected to decline by about 6% in the 2022-2023 crop to 1.72 million tonnes. Currently, Vietnam is the world’s largest producer of Robusta coffee and ranks second in coffee exports.
As one of Vietnam’s 13 major agricultural commodities, the coffee sector contributes 3% of the country’s GDP and creates jobs and stable income for over 600,000 farmers. According to the Export-Import Department (Ministry of Industry and Trade), Europe is currently the country’s largest coffee export market. In Vietnam’s top 10 coffee export markets, there are six European countries. Particularly for the UK market, the Vietnam – United Kingdom Free Trade Agreement (UKVFTA) in force offers great prospects for the Vietnamese coffee sector in this market.
Experts forcast that the global price of coffee will continue to rise in the coming time. (Photo: Internet)
IT IS FORECAST THAT COFFEE EXPORT PRICES WILL CONTINUE TO RISE
The Export-Import Department suggested that the size of the US coffee market is growing in the last few years and is expected to grow well, 6.74% on average over the 2020-2027 period. Therefore, Vietnamese enterprises need to increase their market share in the US.
In the Chinese market, soluble coffee and processed coffee are taking a large market share thanks to their convenience of use. Coffee consumption in China is increasing at an average rate of 15% per year as the demand for coffee is increasing. Therefore, the import potential of Vietnamese coffee in China is very high.
The Vietnam Coffee-Cacao Association (Vicofa) commented that Vietnam’s coffee exports in the last 4 months of the year are very positive.
“The coffee sector in 2022 will grow by 30-40% in terms of export turnover, as the whole world is adapting to Covid-19, demand is high while supply is falling. The export price of coffee can reach 2,400-2,600 USD/tonne in 2022 and the momentum can last until 2023″.
According to the forecast of the Vietnam Coffee-Cocoa Association.
However, according to Vicofa, Vietnam’s coffee exports in the last months of the year will face difficulties due to China’s “Zero Covid” policy; geopolitical tensions in Eastern Europe cause high inflation, which may also have a negative impact on coffee consumption in the upcoming time.
Besides, coffee production in 2022 is lower than in 2021 due to low productivity. Annual production of coffee in 2021-2022 reached 1.5 million tonnes (more than 95% of production is Robusta coffee), lower than 1.62 million tonnes in 2020-2021.
“In Q3 of 2022, Vietnam has about 500,000 tonnes of coffee to export. The new coffee harvest season starting in October will further increase the supply of coffee for export. If the export price of coffee is kept as high as this moment, the coffee industry of Vietnam in 2022 will set a record turnover of 4 billion USD”, Vicofa forecasts.