Coffee prices have been rising strongly for many months. Currently, the price of raw coffee has increased by more than 70% compared to the beginning of the year and 50% compared to the same period last year.
Recently, the US National Oceanic and Atmospheric Administration (NOAA) released the information “EL Nino has appeared”, causing many coffee regions around the world to worry about crop failure this year. This made coffee prices in exchanges in London and New York continuously increase. In Vietnam, the price of this item has also escalated over the past months.
In the Central Highlands provinces, last week, coffee prices increased by 3,000-5,000 VND per kg compared to the previous week. Currently, the price of raw coffee in the domestic market has surpassed 67,000 VND per kg, the highest level ever. In Dak Nong, the coffee price is 67,200 VND per kg, while in Lam Dong and Kon Tum, the price is about 64,000-65,000 VND.
Coffee harvest in Kon Tum province.
Data from the Vietnam Coffee and Cocoa Association (VICOFA) showed that the price of raw coffee in June increased by more than 70% compared to Jan and 50% compared to the same period last year.
On the world market, Robusta coffee prices delivered in July on the New York floor reached a record 2,728 USD (equivalent to more than 64 million VND) per ton on June 10. It was up by 46% against the beginning of this year and reached the highest level ever. In the past three days, global coffee prices have been down but not significantly.
Mr. Nguyen Van Liem – a local business specializing in purchasing coffee in Lam Dong, said that at this time, coffee in the Central Highlands provinces has not entered the harvest, so the amount of coffee sold to the market is scarce. The inventory from last year is not much.
“The coffee harvest in the 2022-2023 crop will take place from Oct to Dec, but according to surveys of households, this year’s output will decline by 20-50% (depending on households),” Mr. Liem said.
Owning a ha of coffee in Kon Tum, Mrs. Hai said the output this year at her garden may decrease by 20% over the same period due to the prolonged heat causing poor flowering and bearing rates.
“Last year, the output from a ha of my coffee was 23 tons (about 5.5 tons of kernel), now only about 18 tons. Since the cost increased, the profit is not significant,” Mrs. Hai said.
According to VICOFA, the output in crop 2022-2023 is forecast to decrease by 10-15% compared to the previous season, to about 1.47 million tons.
The main cause comes from the decline in coffee as farmers switch to other more effective crops such as durian, avocado, or intercropping. Besides, the impact of weather has caused coffee production to decrease strongly.
The report of the Ministry of Agriculture and Rural Development also showed that in the first 05 months, coffee exports reached 882,000 tons and more than 02 billion USD. The figure was down 2.2% in volume but up 0.2% in value over the same period in 2022.
On the international market, the US Department of Agriculture (USDA) forecasts that global coffee exports will decrease by 03 million bags in the 2022-2023 crop, to more than 116 million bags (60 kg bags). Meanwhile, the International Coffee Organization (ICO) kept its forecast at over 167 million bags, which is down only 2.1% from the previous one.
Coffee prices rise to a record high.
Coffee producers and processors said they are struggling with the pressure of increasing input prices. Mr. Nguyen Duc Hung, Founder of Napoli Coffee, said the purchasing power of roasted and ready-made coffee products is decreasing due to the impact of the economic downturn. His business must cut all costs to balance the price of products sold to the market. However, with the current high price of raw materials, businesses are facing many challenges.
“We do not know how to make the input less increase and the output less fluctuate. With this situation, it is unlikely to keep product prices from going up, ” Mr. Hung said.
Sharing the same opinion, Mr. Lam Van Hanh, owner of a roasted coffee factory in Dak Lak, said he is trying to keep prices stable this month. In July, if the price of raw coffee continues to go up at a record high, he will have to discuss with his partners, then decide to produce for orders.
Businesses are worried about crop failure. EL Nino may cause coffee speculation to happen again. Therefore, businesses asked relevant Ministries to have timely solutions for the coffee industry this year.
Vietnam’s coffee area last year reached about 710,000 ha and the output was more than 1.84 million tons. 05 provinces in the Central Highlands accounted for 91.2% of the country’s coffee-growing area./.