Supply is only 300,000 tons left, coffee price reaches 120,000 VND/kg

According to coffee export businesses, Vietnam’s coffee growing areas are currently facing a shrinking area. Drought caused by intense heat and a deep drop in groundwater levels have led to a shortage of irrigation water, so coffee output next season may continue to decline.

Meanwhile, market demand continues to be high and Vietnam is the second largest coffee supplier in the world ; at the same time, Vietnam is also the first country to harvest in the 2023/24 crop year, so it has a strong impact on world prices.

Coffee prices continue to increase, nearly reaching 110,000 VND/kg

Accordingly, the price of robusta coffee last night on the London floor closed with an increase of 66 USD, the May delivery period reached 3,843 USD/ton. This is the highest price on the London floor since the beginning of the year. The July delivery period increased even more strongly, up 75 USD to 3,790 USD/ton. The September delivery period increased 67 USD to 3,702 USD/ton....

The increase in world prices has pushed up the price of coffee in the Central Highlands by 1,500 - 1,700 VND/kg on April 12. Currently, the price of coffee in Dak Nong is 108,500 VND/kg, Dak Lak is 108,300 VND/kg, Gia Lai is 108,200 VND and Lam Dong is 108,000 VND/kg.

At the meeting of the expanded Executive Committee of the Vietnam Coffee and Cocoa Association (VICOFA) on April 11, Mr. Thai Nhu Hiep, Director of Vinh Hiep Company Limited and Vice President of VICOFA, commented: Enterprises are trading at 105,000-110,000 VND/kg. If the coffee price increases to 120,000 VND/kg, it is also normal.

This assessment comes from the fact that world demand is high while Vietnam's supply is running out. Specifically, in the past 6 months, Vietnam has exported nearly 1 million tons of coffee, with an estimated inventory of only about 300,000 tons. Thus, it is likely that Vietnam will no longer have any supply in just 2 months. Meanwhile, the new crop will not begin harvesting until October.

The sharp increase in coffee prices is affecting the coffee supply chain. In particular, there has been a situation where parties involved in the chain have not delivered according to signed contracts despite discussions on risk sharing.

Faced with the above situation, Mr. Nguyen Nam Hai, Chairman of VICOFA, recommended: For the coffee industry to develop sustainably, stakeholders in the value chain need to share risks and increase mutual cooperation. Specifically, FDI enterprises need to cooperate more with VICOFA to be able to work directly with large, reputable exporting enterprises; avoid purchasing from small, unreliable enterprises. In addition, Vietnamese enterprises should limit the situation of buying from far away and selling from far away to limit risks. In addition, enterprises also need capital support from banks to have enough capital to purchase coffee from the people, because the continuous sharp increase in coffee prices can easily cause a shortage of capital to purchase goods.

Source: https://congthuong.vn/nguon-cung-chi-con-300000-tan-gia-ca-phe-tien-den-moc-120000-dongkg-314317.html