Vietnam seizes gains from soaring coffee prices

In the first half of 2024, Vietnam exported nearly 894,000 tonnes of coffee beans, with an estimated value of $3.19 billion. Compared to the same period last year, while export volume decreased by 11.4 per cent, the value increased significantly by 33.2 per cent, according to the General Department of Vietnam Customs' statistics.

The average export price of Vietnamese coffee in June reached $4,489 per tonne, up 5 per cent from May and a substantial 67.3 per cent increase on-year. For the first six months of this year, the average export price hit $3,570 per tonne, up 50.4 per cent compared to the same period in 2023.

According to congthuong.vn, experts estimate that Vietnamese coffee prices could surpass the record peak of $5.5 per kg in late April.

Le Duc Thinh, director of the Ministry of Agriculture and Rural Development's Agricultural Products Processing and Development Department, said, "The high coffee prices are due to supply shortages in the global market. For Vietnam, this is an opportunity to increase export turnover and enhance product value."

Rising coffee prices enable businesses to improve product quality, invest in processing technology, and diversify products to increase added value. Many companies have focused on developing deeply processed coffee products such as roasted beans, flavoured coffee, and coffee bags to boost export value.

High prices also encourage businesses to expand production and seek additional raw materials from farmers, Thinh said. This will help companies better meet export demands in the context of tightened global coffee supply.

However, high coffee prices bring challenges as well as benefits. They affect production and business costs, especially raw material expenses. This will pressure company profits if they cannot adjust selling prices accordingly.

Nguyen Nam Hai, chairman of the Vietnam Coffee-Cocoa Association, said, “The coffee industry faces fierce competition from other producing countries. Maintaining stable quality and output is key to preserving our position in the world market."

Le Thi Hong, an economic expert, added that high coffee prices also pressure consumers and roasters.

"While higher prices bring increased income for farmers, we must consider keeping retail prices from rising too high, affecting end-consumers," Hong said.

To maximise opportunities from high coffee prices, experts also suggest Vietnam's coffee industry needs to build a sustainable development strategy, focusing on improving product quality and expanding export markets.

Forecasting coffee market trends for the last six months of 2024, based on factors such as weather conditions, crop yields, and global consumption demand, coffee prices may not cool down soon. Hong explained that the global coffee supply remains unstable due to climate change impacts and geopolitical factors.

However, Vietnam, with favourable climate conditions and government support policies, has a great opportunity to increase production and exports. In general, amidst the volatile global coffee market, the efforts and innovation of Vietnamese businesses and farmers will play a decisive role in maintaining the position and sustainable development of the coffee industry, Hong added.

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