International buyers flock to Vietnam, leading to nearly $300 million in revenue from just one type of bean within half a month. In the Central Highlands, farmers are making billions and enjoying a grand Tet as they sell coffee at unprecedented historical prices.

According to preliminary statistics from the General Department of Customs, Vietnam exported nearly 95,800 tons of coffee in the first half of January 2024, earning $283 million. Compared to the same period in 2023, coffee export volume only increased slightly by 4.1%, but the value surged by 39.4%.

Coffee has thus become the third-highest export revenue item for the agriculture sector in the first half of January this year, behind wood products ($629.7 million) and seafood ($318 million).

The sharp increase in coffee export revenue is attributed to significant price hikes. By the end of the first trading session of the week, Robusta coffee (the type mainly grown in Vietnam) on the ICE Europe - London exchange continued its upward trend. The March contract rose by $92 to $3,220 per ton, and the May contract increased by $71 to $3,038 per ton.

Analysts point out that Robusta coffee prices surged due to data from the ICE inventory report on January 22, which showed the lowest levels since 2014. Arabica coffee also followed the upward trend as ICE inventories remained at their lowest levels in 24 years. This has prompted speculators and funds to increase their purchases.

Moreover, global shipping and insurance costs, due to extended routing (requiring a detour around the Cape of Good Hope in South Africa) and drought conditions in Brazil, have contributed to the global coffee price surge.

In Vietnam’s coffee capital in the Central Highlands, the price of raw coffee beans has reached VND 73,500-74,200 per kilogram, an unprecedented historical high.

Mr. Nguyen Van Tung from Lam Ha (Lam Dong) mentioned that with the strong price increase, dealers are offering to buy Robusta coffee at VND 73,000-74,000. Compared to last year, coffee prices have increased by 85%.

Tung’s family cultivates nearly 4 hectares of coffee, yielding nearly 20 tons of beans. They have sold half of their coffee at around VND 70,000 per kilogram and plan to wait for even higher prices to sell the rest.

"This year, we have both a good harvest and high prices. I estimate earning about VND 1.4 billion from selling raw coffee," he said, adding that after more than 10 years of coffee cultivation, this is the best price he has achieved, so Tet this year is expected to be more prosperous.

Mrs. Vu Thi Minh from Dak Lak initially planned to hold onto her coffee until near Tet but decided to sell all 12 tons of freshly harvested coffee when offered unexpectedly high prices.

"I started selling coffee in mid-January at VND 71,000 per kilogram, and dealers were still competing to buy," she said. She recalled that last year, she had to find buyers herself, while this year, buyers came to her house.

After selling all her coffee, Minh earned VND 850 million. After deducting costs, she made a substantial profit.

According to export businesses, the global coffee market is experiencing a "price storm" due to supply-demand imbalances. In the domestic market, coffee prices continue to break historical records daily.

Farmers who signed contracts and received advance payments from mid-last year at VND 50,000-60,000 per kilogram have made considerable profits. Those who waited until now to harvest and sell have also benefited greatly despite a decrease in production this year.

In Vietnam, businesses and many growers report a 20-30% reduction in coffee production compared to last year. However, high purchase prices still ensure significant profits for farmers.

Source: Vietstock