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EU is Vietnam's largest coffee consuming market 

 Saturday, August 10,2024

AsemconnectVietnam - EU is Vietnam's largest coffee consuming market in the first half of the year, accounting for nearly 40% of market share with a volume of 353,468 tonnes and a turnover of more than 1.2 billion USD.

According to data from General Department of Customs, European Union (EU) is Vietnam's largest coffee consuming market in the first half of 2024, accounting for nearly 40% of export market share with a volume of 353,468 tonnes and a turnover of more than 1.2 billion USD. Although export volume decreased by 8.5% compared to the same period last year, turnover increased by 40.7%.
According to European Statistical Office (Eurostat), by the end of May, EU spent 5.35 billion EUR to import 1.3 million tonmes of coffee of all kinds from the world market, up 4.8% in volume and 8.7% in value compared to the same period last year.
Main coffee supplying markets for EU include: Brazil, Vietnam, Honduras, Uganda, Colombia, India... Of which, imports from Brazil led with 489,115 tonnes, up 28.6% compared to the same period last year. However, average export price of Brazilian coffee to EU decreased by 7.8% in the first 5 months of the year, down to 3,509 EUR/ton.
Vietnam continued to rank second with a volume of 340,598 tonnes and a value of more than 1 billion EUR. Compared to the same period last year, export volume increased by only 1.5%, but turnover increased by 42.4%, thanks to price of Vietnamese coffee exported to EU skyrocketing by 40.3% to an average of 3,136 EUR/ton. With this result, Vietnam's market share in the total value of coffee imports to the EU increased from 15.2% to 20%.
Decline in global Robusta coffee supply has pushed price of this commodity up continuously in the first months of the year. Vietnam, the world's largest producer and exporter of Robusta coffee, is said to have benefited from this trend.
Vietnam has now surpassed many other leading producers such as India, Switzerland, Brazil, etc. to become the leading supplier of processed coffee (instant coffee, coffee blends) to EU, second only to UK market.
Vietnam's exports of instant coffee and coffee extracts to EU in the first five months of the year increased by 86% compared to the same period last year, reaching 64.5 million EUR, double growth rate of green coffee.
However, green coffee still accounts for a large proportion of about 94% of Vietnam's total exports to EU compared to 6% of instant coffee and coffee extracts.
Import-Export Department said that in 2023, EU coffee imports from the world market will decrease by 10% due to economic recession and high inflation, causing people to tighten their spending. However, when economy recovers, European people's demand for coffee will increase again.
According to the US Department of Agriculture (USDA), EU is currently the world's largest coffee consumer market, accounting for 24-25% of global coffee consumption. EU coffee imports in current crop year are estimated to increase by 1 million bags to 25.5 million bags.
Estimated figures from General Statistics Office show that Vietnam's coffee exports in July reached only about 70,000 tonnes, down 35.7% compared to the same period last year. Thus, this is the 6th consecutive month of decline compared to the same period and the 8th month since the beginning of the crop year.
Accumulated to the end of the first 7 months of 2024, exports of this item are estimated to reach 964,000 tonnes, worth over 3.5 billion USD, down 13.8% in volume but up 30.9% in value compared to the same period in 2023 thanks to a sharp increase in export prices.
Import-Export Department forecasts that Vietnam's coffee exports in the remaining months of the third quarter will decrease due to low supply. By October, when 2024-2025 coffee harvest begins, coffee supplies will increase again.
In 2023-2024 crop year, Vietnam's coffee output is estimated at 1.47 million tonnes - the lowest level in 4 years, down 20% compared to the 2022-2023 crop year according to statistics from Ministry of Agriculture and Rural Development. Coffee output in 2024-2025 crop year is likely to continue to decrease due to unfavorable weather factors.
Thus, if not counting inventory carried over from the previous year, Vietnam will only have about 200,000 tonnes left to export from now until September. However, Vietnamese coffee industry will benefit in terms of price because global Robusta coffee prices will fluctuate in a strong and prolonged upward trend due to concerns about scarce supply from Vietnam.

Source: Vitic/ congthuong.vn
 

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