Improve coffee quality to maintain export prices

Coffee exports are favorable, Vietnam promotes deep processing and green production. Coffee exports increased sharply by over 17%

According to the Vietnam Commodity Exchange (MXV), after a strong increase at the end of October, closing on November 1, in the coffee market, Arabica prices turned around and fell sharply by 4.48% after increasing in the last session of October. Robusta prices also closed 2.28% lower than the reference level. Investors' concerns before the US Federal Reserve's (FED) interest rate meeting caused prices to fluctuate strongly.

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Coffee prices fell slightly in the first session of November

Despite the stock of qualified Arabica on the ICE falling to 380,033 60kg bags, the lowest level in 24 years, coffee prices still turned to decline.

The market had many conflicting speculations about the possibility of the FED raising interest rates before the agency decided to keep interest rates stable at 5.25 - 5.5% in the meeting in the early morning of November 2, Vietnam time.

MXV said coffee is a non-essential commodity and is greatly affected by macroeconomic fluctuations as well as cash flow in the market. This explains the sudden sharp drop in prices after the previous rally despite fundamental information still supporting prices. However, this trend is forecast to not last long.

Following the global trend, this morning in the domestic market, the price of green coffee beans in the Central Highlands and the Southern provinces suddenly dropped sharply by 1,200 VND/kg, completely erasing the recovery level of the previous day. Thus, the domestic coffee purchase price has decreased to 57,000 - 57,800 VND/kg.

China is one of the major markets for Vietnamese coffee.

According to preliminary statistics from the General Statistics Office, Vietnam's coffee exports in October 2023 increased again, reaching 60,000 tons, up 17.7% compared to September 2023, but down 29.7% compared to the same period in 2022. Export turnover reached 189 million USD, up 12.1% compared to September, but down 13.6% compared to the same period in 2022.

In the first 10 months of 2023, Vietnam's coffee exports reached 1.313 million tons, down 9.5% over the same period in 2022; turnover reached 3.32 billion USD, down 0.2%.

In terms of market, China's coffee import rate increases by an average of more than 25% per year. In 2022, this country spent nearly 50 million USD to buy Vietnamese coffee.

In China, instant coffee and processed coffee are taking up a large market share thanks to their convenience in use. This is considered a favorable factor helping Vietnamese coffee businesses promote coffee consumption in this billion-people market.

Recently, many Vietnamese enterprises had the opportunity to introduce processed coffee products at the China - ASEAN Fair held in Guangxi Province, China. Enterprises have learned about consumer tastes and market trends to develop plans to approach official export opportunities to China.

Most coffee businesses in the Central Highlands believe that China is currently a market with great potential and large purchasing power. However, this is no longer an easy market. Because consumers in this country are quite demanding in terms of experiencing new products and high-quality coffee products.

Recognizing China as a large but highly competitive market, businesses in the Central Highlands are making efforts to invest in diversifying specialty coffee and processed coffee products, promoting official exports to the billion-people market.

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