DAILY: Vietnamese coffee prices increased by 1000 VND on January 21, 2024
Tuesday, January 21,2025
AsemconnectVietnam - According to Kinhtedothi, robusta coffee prices in Vietnam's Central Highlands, the country's largest coffee-growing area, increased by 1000 VND per kg to 120,300 –121,000 VND per kg on Monday compared to Yesterday.
Concerns about supply shortages are growing, as Vietnam’s coffee supply may be disrupted during the upcoming Lunar New Year holiday.
Domestic Prices by Region:
- Lâm Đồng (Di Linh, Lâm Hà, Bảo Lộc): 120,300 VND/kg
- Đắk Lắk (Cư M'gar): 121,000 VND/kg; (Ea H'leo, Buôn Hồ): 120,900 VND/kg
- Đắk Nông (Gia Nghĩa): 121,000 VND/kg; (Đắk R'lấp): 120,900 VND/kg
- Gia Lai (Chư Prông): 120,800 VND/kg; (Pleiku, La Grai): 120,700 VND/kg
- Kon Tum: 120,800 VND/kg
International Market:
In the most recent trading session:
In the most recent trading session:
- Robusta coffee prices on the London Exchange (March 2025 contracts) increased by USD137/ton, reaching USD5,143/ton. May 2025 contracts rose by USD128/ton, to USD5,090/ton.
- The New York Exchange was closed on the first day of the week due to a U.S. holiday. However, in the previous session, Arabica prices for March 2025 increased by 1.2 cents/lb to 328.35 cents/lb, and May 2025 contracts rose by 1.45 cents/lb to 324.6 cents/lb.
Factors Driving Robusta’s Surge:
- Limited competition: Robusta benefited from being "alone on the stage" while Arabica trading paused due to the U.S. holiday.
- USD depreciation: The Dollar Index (DXY), measuring the USD against six major currencies, dropped to 108.09, down 1.26 points from January 20, 2025. This decline followed reports that the new administration under President Donald Trump would delay implementing immediate trade tariffs, boosting the currencies of several U.S. trade partners.
Domestic Market Dynamics:
- Coffee harvesting in Vietnam is nearing completion, with farmers expressing optimism due to high yields and rising prices. This not only improves incomes and living standards but also allows reinvestment in production, stabilizing coffee-growing areas after years of declining acreage due to volatile prices.
Outlook:
The global coffee market faces uncertainty over supply shortages, particularly as Vietnam, the world’s largest Robusta exporter, approaches the Lunar New Year holiday. Robusta prices are expected to remain strong, bolstered by reduced USD strength and limited supply.
The global coffee market faces uncertainty over supply shortages, particularly as Vietnam, the world’s largest Robusta exporter, approaches the Lunar New Year holiday. Robusta prices are expected to remain strong, bolstered by reduced USD strength and limited supply.
Export Performance
According to the General Department of Customs, Vietnam exported over 1.34 million tons of coffee in 2024, marking a significant decline of 17.1% compared to 2023. This is the lowest level in nine years.
Key factors behind the decline:
- A 6% decrease in production during the 2023–2024 harvest, with output estimated at only 1.5–1.6 million tons.
However, despite the volume decline, export revenue soared:
- Export value: Reached a record-breaking $5.6 billion, up 32.5% compared to the previous record of $4.24 billion in 2023.
- Average export price: $4,178/ton, up nearly 60% year-on-year.
Global Standing and Strengths
- Vietnam remains the second-largest coffee producer and exporter globally, with an average yield three times higher than the global coffee yield.
- The surge in export revenue highlights Vietnam's ability to capitalize on rising global coffee prices.
Challenges in the Coffee Industry
1. Climate Change:
- Extreme weather events, including increased temperatures and changing rainfall patterns, have significantly affected coffee-growing regions.
- Projections suggest Vietnam could lose 50% of its current Robusta coffee-growing area by 2050 if climate trends persist.
2. Soil Degradation and Diseases:
- Declining soil fertility and the spread of plant diseases are hampering production.
3. Stringent Buyer Requirements:
- Global buyers demand stricter compliance with traceability, food safety, and coffee quality standards, posing challenges for small-scale farmers.
Expert Insights
Dr. Lê Thị Bích Ngọc of the Finance Academy commented:
- Vietnam's significant coffee export achievements are rooted in its natural advantages and high productivity.
- However, the sector must adapt to:
- Mitigate the risks of climate change.
- Invest in sustainable farming practices.
- Improve infrastructure and quality to meet global market demands.
Future Outlook
The industry faces dual challenges of maintaining production levels while meeting evolving global standards. Innovations in climate-resilient farming and better resource management will be critical to ensuring Vietnam’s sustained position as a global coffee leader.
T.Huong
Source: Vitic
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