After rice, another type of nut is now experiencing a global price surge. Vietnam, being the world's leading producer, is seeing domestic prices setting new historical records.

While rice prices have cooled off after a prolonged "price storm" at the beginning of 2024, coffee prices continue to rise sharply. This type of nut is experiencing a global price surge due to scarce supply.

As of the end of the trading session on January 31, Robusta coffee prices on the ICE Europe - London exchange were at $3,305 per ton for the March contract and $3,168 per ton for the May contract.

Compared to the end of December last year, the March contract price has risen by 16.3%, and the May contract by 14.9%. Compared to the same period in 2023, Robusta coffee prices have increased by 62.2% and 57.5%, respectively.

Reports indicate that Robusta coffee prices have surged due to inventory data from ICE showing a record low since 2014 as of January 22. This has led speculators and funds to increase their purchases.

Additionally, global shipping and insurance costs, due to extended shipping routes (e.g., around the Cape of Good Hope in South Africa), have made coffee even scarcer worldwide.

Drought conditions have reduced coffee production from major exporting countries such as Brazil and Vietnam, contributing to short-term supply concerns.

In 2023, economic difficulties led roasters to tighten production costs and consumers to reduce spending, prompting a shift towards Robusta coffee as a cost-effective alternative.

Vietnam is the second-largest coffee producer globally, following Brazil, and leads in Robusta coffee production.

According to export businesses, the global coffee market is in a "price storm" due to supply-demand imbalances, and Vietnam, as a major producer and exporter, benefits from this situation.

Statistics from the General Department of Customs show that in 2023, Vietnam exported approximately 1.61 million tons of coffee, earning $4.18 billion. The coffee export value set a historical record.

In January 2024, coffee exports reached $620 million, a staggering 103% increase compared to the same month last year.

Currently, domestic coffee prices are rising daily, continuously breaking historical records. Specifically, in Dak Lak, the price of raw coffee beans has reached 79,000 VND/kg; in Lam Dong, 78,200 VND/kg; Gia Lai, 78,800 VND/kg; and Dak Nong, 79,500 VND/kg.

The average coffee price in the Central Highlands is 78,900 VND/kg. Compared to the same period in 2023, coffee prices have increased by 85.6%. This is the highest price ever, benefiting farmers who are currently harvesting this crop.

In a recent statement, Mr. Phan Minh Thong, General Director of Phuc Sinh Co., Ltd., recalled the coffee price surge over the past year.

According to him, the price of coffee, initially at 34,000 VND/kg, rose to 48,000 VND/kg at the beginning of 2023. It was the first time in 15 years that coffee prices reached this level. Small farmers and suppliers sold off large quantities until the price hit 50,000 VND/kg, after which stock ran out.

In May 2023, coffee prices skyrocketed. By early June, the scarcity continued, and prices set a historical record of 67,000 VND/kg in July 2023.

"For the first time in 25-30 years, numerous surveys of coffee-growing areas have been conducted. Almost all coffee warehouses were empty, with barely a few bags left," Mr. Thong said.

Since late last year, coffee prices have surged dramatically, surpassing 70,000 VND/kg and nearing 80,000 VND/kg.

Vietnam has been the world's leading producer and supplier of Robusta for many years. The global market has become accustomed to purchasing Robusta from Vietnam at lower prices. Coffee roasters worldwide have adjusted their roasting formulas to include a large proportion of Vietnamese Robusta.

Mr. Thái Như Hiệp, Vice Chairman of the Vietnam Coffee-Cocoa Association, stated, "Global importers are seeking coffee from Vietnam." In reality, businesses have nearly "cleaned out" their stock for export, leading to a significant reduction in inventory. In 2023, it was the first time in history that, by June, there was no coffee left for sale.

According to the Ministry of Agriculture and Rural Development, coffee production in 2024 is expected to drop to 1.66 million tons. However, export value is projected to reach $5 billion due to high prices.

The Vietnam Coffee-Cocoa Association forecasts that the coffee industry will continue to benefit in the 2023-2024 crop year due to high Robusta prices, which may even peak due to supply shortages. Vietnamese raw coffee prices could be the highest in the world this year.

Source: Vietstock