In recent times, domestic coffee prices have continuously increased, many farmers have invested in new planting or cleared other trees to grow coffee. Typically, in Gia Lai province, there are currently about 100,600 hectares of coffee, of which 90,000 hectares are in business stage, with an average yield of over 3.1 tonnes of beans/ha and an output of over 281,000 tonnes each year.
The fact that many households are racing to plant new and replant coffee has caused price of seedlings in this locality to increase and supply to become scarce.
According to experts, recent price developments reflect the steps, exploration and market monitoring of investors, including speculators.
Up to now, source of coffee beans stored by the people has been exhausted. This is related to production activities in the past, when the market price increased, everyone rushed to sell. Agricultural market has not been regulated, managed and forecasted closely, farmers have decided on output of their products. Therefore, before the Tet holiday, people's stored coffee was sold out.
For nearly 3 months, prices have continued to increase, farmers have no more coffee. Opposite effect is that businesses are confused with risk of shortages for export contracts. They are forced to buy up coffee with reduced quality or have to buy coffee from traders and export activities are difficult. Thus, market price increase means that traders manipulate market share.
Farmers hope to boost production to harvest coffee again before market fluctuates downward. The current coffee crop is preparing to harvest, promising that confidence, forcing them to accept increased input investment, because agricultural materials are increasing.
According to data from General Department of Customs, in May 2024, our country's coffee exports reached 95,000 tonnes with a total value of 400 million USD, down 44% in volume and 38% in value. This shows that the supply is decreasing, which is expected to continue to support high coffee prices in the coming time.
In the first 5 months of 2024, Vietnam's coffee exports reached 833,000 tonnes, worth 2.9 billion USD, down 3.9% in volume, but up 43.9% in value over the same period. Of which, Robusta coffee accounted for about 82% of total exports.
With a more positive global economic outlook, coffee consumption is forecast to grow by 2% to 3% during the 2024/2025 harvest. Global coffee consumption growth in general is expected to average around 0.95% year-on-year, with a total of 171.50 million bags in the upcoming 2024/25 harvest, according to many independent forecasters. This growth is largely driven by relatively new coffee consuming markets and producing countries such as China, India, Indonesia, the Middle East and Vietnam, which have all recorded increased domestic coffee consumption.
Meanwhile, coffee market has also seen a change in the roles of the two main commodities. Two years ago, Robusta coffee exports were only half that of Arabica coffee, but now things have changed completely. According to Vicofa, Vietnam mainly produces Robusta coffee (accounting for more than 94% of the area and output) while Arabica coffee (mainly Catimo variety) accounts for a low proportion. This means that Vietnamese coffee industry has benefited from new developments in prices of two main coffee varieties in the world.
Vietnam's coffee supply is gradually depleting while the prospects for the next crop are not very optimistic. Import-Export Department (Ministry of Industry and Trade) recently predicted that coffee prices will increase again, mainly due to investors' increasing concerns about the supply prospects from Vietnam.
Currently, hedge funds have increased their net buying position with forecast that Robusta supply from Vietnam will continue to be scarce in the coming time. According to information from trader Volcafe, Vietnam's Robusta coffee output in the 2024/2025 crop year is estimated at 24 million bags, the lowest level in 13 years, due to unfavorable weather.
According to report of US Department of Agriculture's Foreign Affairs Office (USDA Post), Vietnam's coffee output in the 2024-2025 crop year is forecast at around 29 million bags (60 kg/bag), a slight decrease compared to the estimated 29.1 million bags in the 2023-2024 crop year.
Of which, Robusta coffee output reached 27.85 million bags, lower than the 28 million bags of the previous crop year, Arabica output will increase slightly to 1.15 million bags.
USDA Post believes that total coffee area in Vietnam will remain stable at around 600,000 hectares in the next few years. Farmers can earn twice as much income growing durian as growing coffee. However, rising coffee prices have helped stabilize coffee acreage and this is still an important crop in highland provinces such as Lam Dong and Dak Lak.
Vietnam's coffee exports in the 2023-2024 crop year are forecast at around 26.85 million bags (GBE), down about 5% compared to the previous crop year. This figure is expected to continue to decrease to 26.5 million bags in the next crop year.
The reason is that Vietnam's coffee inventories have decreased sharply from 3.6 million bags in the 2022-2023 crop year to only 892,000 bags in 2023-2024 crop year and only 492,000 bags in 2024-2025 crop year.
Recent reports from the USDA also present a mixed picture of coffee production in different countries. Accordingly, production is expected to increase in Brazil and recover in Indonesia, Colombia, Peru, Mexico, Nicaragua. In contrast, outlook looks negative for Guatemala, Costa Rica and especially Honduras.

Source: Vitic/ congthuong.vn