In the past half-month, international buyers have flocked to Vietnam, leading to nearly 300 million USD in revenue from the sale of a single type of bean. In the Central Highlands, farmers are making billions and celebrating a prosperous Tet holiday as coffee prices reach historic highs.

According to preliminary statistics from the General Department of Customs, in the first half of January 2024, Vietnam exported nearly 95,800 tons of coffee, earning 283 million USD. Compared to the same period in 2023, coffee exports saw a slight increase of 4.1%, but the value surged by 39.4%.

As a result, coffee has become the third-highest export commodity in the agricultural sector for the first half of January this year, following wood products (629.7 million USD) and seafood (318 million USD).

The surge in coffee export revenue is attributed to a significant rise in coffee prices.

At the end of the first trading session of the week, Robusta coffee prices (primarily grown in Vietnam) on the ICE Europe - London market continued to rise. The March contract increased by 92 USD to 3,220 USD/ton, while the May contract rose by 71 USD to 3,038 USD/ton.

Reports indicate that the sharp rise in Robusta coffee prices is due to ICE inventory data on January 22 dropping to the lowest level since 2014. Arabica coffee prices also surged as ICE inventories remained around their lowest in 24 years, prompting speculators and funds to increase their buying.

Additionally, global shipping and insurance costs have contributed to the coffee price spike due to extended shipping routes (around the Cape of Good Hope in South Africa) and drought conditions in Brazil.

In Vietnam's coffee capital of the Central Highlands, the price of coffee beans has risen to 73,500-74,200 VND/kg, an unprecedented level in history.

Nguyen Van Tung from Lam Ha (Lam Dong) noted that coffee prices have surged recently, with dealers offering to buy Robusta coffee at 73,000-74,000 VND. Compared to the same period last year, coffee prices have increased by 85%.

Tung's family grows nearly 4 hectares of coffee, producing almost 20 tons of beans. He has sold half of the beans at around 70,000 VND/kg and plans to wait for higher prices to sell the rest.

“This season, we have both a good yield and high prices. I estimate that we will earn about 1.4 billion VND from selling coffee beans,” he said, adding that this is the best selling price he has achieved in over a decade of coffee cultivation, making this Tet holiday particularly special.

Although Tung planned to hold onto his coffee until just before Tet, he decided to sell his entire 12 tons of freshly harvested beans when offered an unexpectedly high price.

“I started selling coffee beans in mid-January at 71,000 VND, and dealers were competing to buy them,” she said. She recalled that last year, she had to find buyers herself, but this year, buyers came to her home to purchase.

After selling all her coffee, she made 850 million VND, with a substantial profit after deducting expenses.

According to export companies, the global coffee market is experiencing a “price storm” due to an imbalance between supply and demand. In the domestic market, coffee prices have been rising daily, continuously breaking historical records.

Farmers who signed contracts and received advance payments of 50,000-60,000 VND/kg from mid-last year have made significant 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% decrease in coffee production compared to last year. However, due to the high purchase prices, farmers are still achieving significant profits.

Source: Vietstock