Vietnamese coffee exports may face difficulties as some farmers are hoarding their supplies following a poor harvest and increased risks in the Red Sea region.

According to Mr. Trịnh Đức Minh, Chairman of the Buôn Ma Thuột Coffee Association in Đăk Lăk province, some farmers are waiting for domestic prices to rise before selling their coffee. During this period, they rely on income from selling fruits like durian to cover their expenses. Domestic robusta coffee prices have now reached record levels.

Mr. Phan Hùng Anh, CEO of Quang Minh Coffee Trading Co., Ltd., stated, “I have never seen such a hoarding situation at this time of year. This is the most difficult season since I started my business in 1994. The prices of fruits are increasing, so farmers are selling them first to cover living and production costs.”

The 2023-2024 coffee harvest season in Vietnam is nearly complete, with production forecasted to reach 1.66 million tons, according to the average estimates of exporters and coffee traders surveyed by Bloomberg. This figure is about 7% lower than the previous season.

Robusta coffee futures prices in London are also at record highs due to supply shortages and have increased more than 30% since early October 2023. According to Mrs. Trần Thị Lan Anh, Deputy Director of Vĩnh Hiệp Co., Ltd., some buyers have reduced their purchases of Vietnamese coffee due to increased shipping costs caused by the conflict in the Red Sea.

Mr. Phạm Quang Vinh, a coffee buyer in Gia Lai province supplying traders and exporters including Olam Group Ltd, mentioned that after domestic robusta coffee prices surged, some Vietnamese coffee growers canceled contracts they had signed at the beginning of the season.

He noted that some farmers are worried they will miss out if prices rise to 100,000 VND/kg, which is 40% higher than the current domestic price.

Source: Vietstock