Coffee prices hit record highs.

Coffee prices have been escalating for months, with bulk green coffee prices currently up more than 70% since the beginning of the year and 50% compared to the same period last year.

Recently, the US National Oceanic and Atmospheric Administration (NOAA) announced that "El Niño has appeared," causing concern in many coffee-growing regions around the world about potential crop failures this year. This has led to a continuous increase in coffee prices on exchanges in London and New York. In Vietnam, the price of this commodity has also been rising for several months.

People harvesting coffee in Kon Tum . Photo: Huynh Phuong

In the Central Highlands provinces, coffee prices increased by 3,000-5,000 VND per kilogram last week compared to the previous week. Currently, the price of green coffee beans in Vietnam has exceeded 67,000 VND per kilogram, the highest level ever. In Dak Nong, the price reached 67,200 VND per kilogram, while in Lam Dong and Kon Tum, the price is around 64,000-65,000 VND.

Data from the Vietnam Coffee and Cocoa Association (VICOFA) shows that the price of bulk green coffee beans in June increased by more than 70% compared to January and by 50% compared to the same period last year.

On the world market, the price of robusta coffee for July delivery on the New York exchange reached a record high of $2,728 (equivalent to over 64 million VND) per ton on June 10th, a 46% increase compared to the beginning of this year and the highest level ever. For the past three days, world coffee prices have slightly decreased, but not significantly.

Mr. Nguyen Van Liem, a local business owner specializing in purchasing coffee in Lam Dong province, said that at this time, the coffee harvest in the Central Highlands provinces has not yet begun, so the quantity available on the market is scarce, with only a small amount remaining from last year, and it is insignificant.

"The 2022-2023 coffee harvest will take place from October to December, but according to surveys of growers, this year's yield has decreased sharply by 20-50% (depending on the household)," Mr. Liem said.

Owning one hectare of coffee in Kon Tum, Ms. Hai said that this year's yield in her garden may decrease by 20% compared to the same period last year due to prolonged hot weather causing poor flowering and fruit setting rates.

"Last year, one hectare of my coffee plantation yielded 23 tons, but now it's only about 18 tons, while costs have increased significantly, so the profit is negligible," Ms. Hai said.

According to VICOFA, the projected output for the 2022-2023 crop year is expected to decrease by approximately 10-15% compared to the previous year, down to around 1.47 million tons.

The main reason stems from the declining area of ​​coffee cultivation as people switch to other, more profitable crops such as durian, avocado, or intercrop them in their gardens. In addition, the impact of weather has caused coffee production to plummet.

According to a report by the Ministry of Agriculture and Rural Development, in the first five months of the year, coffee exports reached 882,000 tons and over $2 billion, a decrease of 2.2% in volume but an increase of 0.2% in value compared to the same period in 2022.

On the international market, the US Department of Agriculture (USDA) forecasts world coffee exports will decrease by 3 million bags in the 2022-2023 crop year, to just over 116 million bags (60 kg bags). Meanwhile, the International Coffee Organization (ICO) maintains its forecast at over 167 million bags, a decrease of only 2.1% compared to the previous crop year.

Coffee producers and processors report struggling with rising input costs. Speaking to VnExpress , Mr. Nguyen Duc Hung, founder of Napoli Coffee, said that demand for roasted and ground coffee, as well as ready-to-drink coffee, is decreasing due to the economic downturn. His company has had to cut all costs to balance the price of its products. However, with the current high prices of raw materials, businesses face numerous challenges.

"We're struggling to figure out how to keep input costs from rising and output prices from fluctuating too much. But with the current situation, it's difficult to stop product prices from increasing," Mr. Hung said.

Sharing the same view, Mr. Lam Van Hanh, owner of a roasted and ground coffee production facility in Dak Lak, said he is trying to maintain product prices this month. In July, if green coffee prices continue to reach record highs, he will have to discuss the matter with his partners before deciding whether to produce any more orders.

Businesses are concerned that crop failures and El Niño could lead to a resurgence of coffee speculation. Therefore, businesses are requesting that relevant ministries and agencies provide timely solutions for the coffee industry this year.

Last year, Vietnam's coffee growing area reached approximately 710,000 hectares, with a production of over 1.84 million tons. Of this, the five Central Highlands provinces accounted for 91.2% of the country's total coffee growing area.

Thi Ha

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