Vietnamese coffee achieves great success, awaiting a historic decision from the $48 billion market.

Vietnamese coffee has had an unprecedentedly successful export season, setting many historical records. This strength of our country is awaiting a historic decision from the EU market, which is worth nearly $48 billion.

A harvest of records.

According to preliminary statistics from the General Department of Customs, coffee exports in October 2024 are estimated at 50,000 tons, valued at US$292.7 million; bringing the total volume of coffee exports in the first 10 months of this year to nearly 1.2 million tons, earning US$4.6 billion. Although the volume of coffee exports decreased by 10.8%, the value surged by 40.1% compared to the same period in 2023.

The average export price of coffee in the first 10 months is estimated at US$3,981 per ton, a 57% increase compared to the same period in 2023. This is a record high price in the past 30 years since Vietnamese coffee entered the world market.

According to the report on coffee export turnover for the 2023-2024 crop year (from October 2023 to October 2024) by the Vietnam Coffee and Cocoa Association (VICOFA), Vietnam exported approximately 1.46 million tons of coffee, a decrease of more than 12.1% compared to the previous crop year.

However, the value still increased sharply by 33% due to coffee prices reaching historical highs. As a result, coffee exports in the past crop year brought in over $5.4 billion - an unprecedented level.

Mr. Do Ha Nam, Vice Chairman of VICOFA, commented that 2024 was a very special year for this industry. For the first time, the price of Vietnamese coffee was the highest in the world. The export price of Robusta coffee (the type of coffee that Vietnam produces the most in the world) was even higher than the price of Arabica coffee.

Businesses and experts also believe that 2024 will be a "miracle year," with the Vietnamese coffee industry achieving great success. Prices will be so high that they'll be "unbelievable even in a dream."

In fact, Vietnam's coffee export prices have been steadily increasing since the beginning of the year. Specifically, in January, this bitter-tasting bean from our country had an export price of only 3,054 USD/ton, but by October it had jumped to 5,855 USD/ton. That means in just 10 months, the price of this commodity has increased by 91.7%.

Similarly, the price of bulk green coffee beans in the domestic market at the end of October last year fluctuated between 58-59 million VND/ton, but by November 8th it had increased to 105-106 million VND/ton. Furthermore, at the end of April, the price of coffee even reached a historical peak of 131 million VND/ton.

At this price, in the coffee capital of the Central Highlands, people even liken coffee trees to "ATMs," helping farmers "make billions of dong."

Besides record-breaking prices and export value, Vietnamese coffee is increasingly demonstrating its important role in the global market. Consequently, the decline in our country's coffee production is having a strong impact on world price trends.

Vietnamese coffee is entering a new harvest season. VICOFA forecasts that coffee exports will recover in the last months of the year due to increased supply and demand during the year-end period.

With the EUDR in effect, Vietnamese coffee prices are expected to rise sharply.

However, the Vietnamese coffee industry is awaiting a historic decision regarding the European Union's Anti-Deforestation Regulation (EUDR).

Vietnamese coffee has been exported to over 80 countries and territories. Of these, the European Union (EU) market accounts for approximately 38% of Vietnam's total annual coffee exports.

The EU is currently the world's largest coffee importer, accounting for approximately 33-35% of the global market share. Its coffee consumption is projected to reach nearly $48 billion in 2024 and exceed $58 billion by 2029. Therefore, any major policy changes regarding imported goods will immediately impact coffee prices.

By meeting EUDR requirements, Vietnamese coffee will benefit from lower prices when the EU implements this regulation. Photo: Nguyen Hue

According to the EUDR roadmap, from December 30, 2024, companies will not be able to export certain agricultural products (including coffee) to the EU market unless they can prove that their products are not linked to deforestation.

Therefore, as soon as the EU issued new regulations related to coffee imports, concerns arose in both domestic and international markets about the changing supply and demand situation. This was quickly reflected in the coffee price movements in 2024.

EU countries have been racing to import coffee to secure supplies before December 30th. Coupled with pressure from declining coffee production in many producing countries, which has caused global price surges, the market has fallen into a state of localized supply-demand imbalance.

Last October, the European Commission (EC) proposed postponing the implementation of the EUDR for another year and quickly received support from the EU Council (EUCO), but faced opposition from environmental organizations. The final outcome of the EUDR roadmap will be voted on by the European Parliament on November 13-14.

If the EUDR maintains its current trajectory, in the short term, importing countries will increase their purchases in the remaining months of 2024, causing a surge in coffee demand. This will create a supply-demand imbalance, providing significant support for coffee prices in the last two months of the year.

However, if the EU decides to postpone the implementation of the EUDR, the supply and demand for coffee on the market will temporarily stabilize. With the addition of supply from coffee harvested in Vietnam's 2024-2025 crop year, world coffee prices are likely to remain below US$4,700/ton. Similarly, domestic coffee prices will only fluctuate between VND 100,000 and VND 110,000/kg.

Mr. Do Ha Nam stated that Vietnam was the first and most active country in implementing the EUDR. To date, most of our country's export businesses are ready to export coffee that meets the EUDR as soon as this regulation is implemented.

In recent months, many European importers have focused on buying Vietnamese coffee as the EUDR implementation deadline approaches. This is because Vietnam is almost the only coffee supplier at this time that can reliably help them meet EUDR regulations. As a result, Vietnamese coffee prices have risen to the highest levels in the world.

If the EUDR is implemented immediately, Vietnamese coffee will benefit greatly in terms of price because the country is starting a new harvest season, with export volume exceeding 1 million tons, the VICOFA leader emphasized.

With record-high prices, Vietnam rakes in $4 billion from bitter-tasting nuts. The price of this nut, a leading export for Vietnam, has surged to a historical record, generating over $4 billion in revenue. This revenue is expected to increase significantly as growing regions prepare for the upcoming harvest of millions of tons.

Source: https://vietnamnet.vn/ca-phe-viet-thang-lon-cho-quyet-dinh-lich-su-tu-thi-truong-48-ty-usd-2340088.html