Since the EVFTA came into effect, Vietnam's coffee exports to the EU have continuously increased in value. Many European roasters are actively accelerating coffee imports ahead of the European Union Deforestation Regulation (EUDR), which will take effect from the beginning of January 2025. 

 In the first eight months of 2024, Vietnam's coffee exports to the EU reached about 420,000 tonnes, valued at 1,549.4 million USD, a decrease of 9% in volume but an increase of 42.7% in value compared to the same period in 2023. The proportion of Vietnam's coffee exports to the EU accounted for 38% of the total export value of this commodity of the whole country during this period. 

From the beginning of the year until now, Vietnam's coffee export growth rate to the EU has experienced growth in January, March, July, and August 2024, and negative growth in February, April, May, and June 2024. 

The average export price of Vietnamese coffee to the EU in August 2024 reached 5,250 USD/tonne, an increase of 6% compared to July 2024 and an increase of 86.4% compared to August 2023. In the first eight months of the year, the average export price reached 3,709 USD/tonne, an increase of 54.3% compared to the same period in 2023. 

Vietnam's coffee exports to the EU have decreased in volume in the first eight months of this year due to low inventory and limited supply. This is primarily due to the impact of climate change, leading to drought and storms in many places, especially in the Central Highlands, Vietnam's major coffee-growing region. Coffee gardens have started to show early ripening fruits in September 2024. However, due to the impact of storms, the harvest may start later than usual. According to weather reports, prolonged storms could affect the progress of coffee harvesting in the coming time. This year is also the first time coffee prices have reached a record high before entering the harvest season. 

The Central Highlands coffee harvest season starts from November to December, so at present, Vietnam's supply is at its lowest level of the year. Coffee prices may increase further in the last few months of the year when global supply conditions worsen. 

According to the Vietnam Coffee - Cocoa Association (VICOFA), Vietnam's coffee production in the 2023-2024 crop year is estimated to decrease by 20% compared to the previous crop year, down to 1.47 million tonnes, the lowest in 4 years, putting pressure on the global Robusta supply. 

Coffee prices have surged due to increased demand both domestically and internationally, especially in Southeast Asian countries, while adverse weather conditions and supply chain disruptions have contributed to lower production. Vietnamese coffee production is increasingly affected by prolonged drought and rising temperatures, as well as storms and floods, resulting in reduced yields and affected crop quality. 

According to VICOFA, Vietnam currently has only about 148,000 tonnes of coffee for export in the remaining two months of the 2023/2024 crop year (from August to the end of September), until the new crop starts harvesting in October this year. Coffee exports are now looking forward to the new harvest and are expected to set a new record of 5.5 - 6 billion USD for annual coffee exports. 

Vietnam’s coffee industry is facing numerous challenges from natural conditions, geopolitical tensions, and rising production costs. However, as the world's second-largest coffee exporter and with ongoing efforts to improve the value chain, Vietnam's coffee industry still can overcome difficulties and continue to make significant contributions to the national economy. 

Vietnam's coffee exports to the EU have benefited greatly from the EVFTA, and the increasing quality of coffee has driven up prices. Additionally, the global coffee supply has declined since 2022, particularly in Brazil, Colombia, and Peru, which are competitors of Vietnam, opening opportunities for Vietnamese coffee exporters to capture market share in the EU. 

Overall, the increasing value of coffee exports to the EU demonstrates that this commodity has taken advantage of opportunities to access and penetrate the EU market, enhancing its competitiveness through tariff preferences and preferential tariffs under the EVFTA. 

Market structure of member countries by export value from Vietnam 

According to calculations from data of the Vietnam General Department of Customs, in the first eight months of 2024, Vietnam's coffee exports to major markets in the EU have seen a sharp increase compared to the same period in 2023 due to rising prices. Specifically: 

Exports to Germany were the largest at 471.8 million USD (equivalent to 129.9 thousand tonnes), an increase of 43.9% in value but a decrease of 11% in volume compared to the same period in 2023, accounting for 30.46% of Vietnam's total coffee exports to the EU market, lower than the proportion of 29.83% in the same period of 2023.

 The export price reached an average of 3,631 USD/tonne, an increase of 63.9% compared to the same period last year. In August 2024 alone, coffee exports to Germany reached 8.2 thousand tonnes, valued at 43.8 million USD, a decrease of 8.86% in volume and a decrease of 1% in value compared to July 2024 and a decrease of 0.2% in volume and an increase of 91.3% in value compared to August 2023. The price of coffee exported to Germany this month averaged 5,200 USD/tonne, an increase of 8.5% compared to the previous month and an increase of 91.3% compared to the same period last year. 

Ranking second was Italy, with exports reaching 331.33 million USD (equivalent to 99 thousand tonnes) in the first eight months of the year, a decrease of 13% in volume but an increase of 46% in value compared to the same period in 2023, accounting for 21.38% of Vietnam's total coffee exports to the EU market, lower than the proportion of 23.25% in the same period of 2023. The price of coffee exported to Italy during this period reached an average of 3,343 USD/tonne, an increase of 51% compared to the same period last year. In August alone, coffee exports reached 35.7 million USD (equivalent to 8 thousand tonnes), increasing 85% in value and 78% in volume compared to July 2024 and increasing 101% in value and 7% in volume compared to August 2023. The average price of coffee exported to Italy this month reached 4,465 USD/tonne, an increase of 4% compared to the previous month but an increase of 88% compared to the same period last year. 

Ranking third was the Spanish market, reaching 304 million USD (equivalent to 77.2 thousand tonnes), an increase of 81% in value and 17.1% in volume compared to the same period in 2023, accounting for 19.6% of the total value of Vietnam's coffee exports to the EU market, higher than the 15.5% level of the same period in 2023. The average export price during this period reached 3,935 USD/tonne, an increase of 54.3% compared to the same period last year. In August alone, exports reached 30.5 million USD (equivalent to 5.4 thousand tonnes), a decrease of 10% in value and a decrease of 15% in volume compared to July 2024 but an increase of 8.7% in volume and an increase of 79.5% in value compared to August 2023. The export price to this market averaged 5,602 USD/tonne, an increase of 6% compared to the previous month but an increase of 65% compared to the same period last year. 

Coffee exports to Bulgaria increased the most during this period, with a 112.68% increase. 

On the contrary, in the first eight months of 2024, the volume of coffee exports to some markets decreased compared to the same period in 2023, such as exports to Latvia decreased by 69.02% to 774.743 USD; to Finland decreased by 66.18% to 961.398 USD; to Lithuania decreased by 63.10% to 335.850 USD. 

Notably, Vietnamese coffee has penetrated the Austrian and Slovakian markets this year. Although the volume is very small, it is still a significant step forward. 

 

 

T.Huong