Robusta coffee prices increased sharply at the end of the year, an unprecedented event in the history of the Vietnamese coffee industry.

The Vietnam Coffee and Cocoa Association (Vicofa) estimates that there is a shortage of about 1.5 - 2.5 million bags of coffee according to contracts and needs to be met from the current coffee harvest, while farmers are still unwilling to sell at current prices, pushing prices to continue to increase on the London floor.

World coffee prices continued to increase well, with robusta increasing quite strongly in the last session of 2023. Experts said that the market reacted when hearing the news that Vietnam still lacked 80,000 - 15,000 tons of coffee and had no goods to deliver on time for the contract.

However, in the last trading week of 2023, coffee prices on both exchanges decreased. Traders took profits along with the USD recovering slightly. In addition, information about favorable rains in Brazilian coffee regions pushed the market down.

Coffee prices in the domestic market remain high. It is noted that the highest transaction level in the surveyed localities is 70,000 VND/kg. According to estimates by the General Statistics Office, Vietnam's coffee exports in 2023 will decrease by 9.6% compared to 2022, to 1.6 million tons. However, revenue will increase by 3.1% to reach 4.2 billion USD in the year.

Giá cà phê hôm nay 30/12/2023: Giá cà phê

Domestic coffee prices on December 29 increased by 1,100 - 1,100 VND/kg in some key purchasing localities. (Source: Freepik)

Recorded in the closing session on December 29, the price of robusta coffee on the ICE Futures Europe London exchange adjusted up, the delivery term for March 2024 increased by 67 USD, trading at 2,936 USD/ton. The delivery term for May 2024 increased by 37 USD, trading at 2,849 USD/ton. The average trading volume was high.

Arabica coffee prices on the ICE Futures US New York exchange increased well, with the March 2024 delivery period increasing by 0.25 cents, trading at 198.00 cents/lb. Meanwhile, the May 2024 delivery period increased by 0.4 cents, trading at 195.75 cents/lb. The average trading volume is high.

Domestic coffee prices on December 29 increased by 1,100 - 1,100 VND/kg in some key purchasing localities.

Average price	Medium
USD/VND exchange rate	24,050	- 50
DAK LAK	70,000	+ 1,100
LAM DONG	69,200	+ 1,100
GIA LAI	69,900	+ 1,100
DAK NONG	70,000	+ 1,100

Unit: VND/kg.

(Source: Giacaphe.com)

Domestic coffee prices are expected to remain high next year, due to a severe supply shortage in the 2022/2023 coffee crop.

Coffee prices rose to a 30-year high, leading to an unprecedented event in Vietnam's history, with no coffee left to export by June.

In addition, there is an unusual decrease in the area of coffee cultivation. According to the Ministry of Agriculture and Rural Development , our country currently has over 700,000 hectares of coffee, but Mr. Nam said that the actual figure may only be about 600,000 hectares and is continuing to shrink due to competition with other fruit trees such as avocado, durian... which have higher profits.

The unpredictable fluctuations in coffee prices have caused a series of difficulties for exporters. In fact, last year, Vietnam had to import nearly 100,000 tons of coffee from Brazil and Indonesia to pay off debts for contracts. This is unprecedented in the history of the Vietnamese coffee industry.

According to data from the ICO, the world coffee price (I-CIP) increased by 6.3% compared to the previous month and increased by 3.1% compared to the same period last year, reaching an average of 161.5 US cents/pound (fluctuating from 153.3 - 170 US cents/pound).

According to the Import-Export Department (Ministry of Industry and Trade), in November 2023, robusta and arabica coffee prices increased sharply due to concerns about supply shortage.

In the coming years, India and Vietnam will lead the growth in coffee consumption in the Asian market - a region where fierce competition is expected to force chains to innovate to survive, industry experts say.

Coffee drinking habits are correlated with discretionary income and urbanization, said Euromonitor Asia, which used those two factors to determine which countries will drive the coffee consumption boom between 2022 and 2027.

Euromonitor data shows that developing countries such as the Philippines and Indonesia will also see strong demand for coffee. However, India and Vietnam remain the top two countries, with consumption forecast to increase by 37% and 32%, respectively, by 2027.

Source