Vietnamese coffee exports hit a record-breaking price of $3,054 per ton in August, marking a historic high for the domestic market as well. Businesses report that the coffee industry has never faced a shortage as it does today.
According to data from the General Department of Customs, Vietnam’s coffee exports in August 2023 were low, with 84,650 tons, generating $258.5 million, a 25.1% decrease in volume and a 2.9% decrease in value compared to August of the previous year.
In the first 8 months of 2023, Vietnam’s coffee exports reached 1.2 million tons, valued at $2.96 billion. While this represents a 5.4% decrease in volume compared to the same period last year, it reflects a 3.1% increase in value.
In August 2023, the average export price of Vietnamese coffee hit a record high of $3,054 per ton, an 8% increase compared to the previous month and a substantial 29.7% surge compared to August 2022.
The average export price of Vietnamese coffee for the first 8 months of 2023 was $2,463 per ton, marking an 8.9% increase compared to the same period the previous year.
Market Trends
As of August this year, coffee exports to Germany, Spain, and Belgium have decreased, while exports to Italy, the United States, Japan, Russia, Algeria, and the Netherlands have seen significant growth. Notably, coffee exports to the Indonesian market have experienced an extraordinary 157.8% increase in volume and a 118.6% increase in value compared to the same period last year.
According to the Import-Export Department of the Ministry of Industry and Trade, the market is concerned about the potential El Nino weather phenomenon expected to occur later this year, which may cause drought in some of the major coffee-producing countries around the Pacific Rim. Additionally, the volume of certified coffee on both stock exchanges remains at very low levels.
Short-term Robusta coffee prices are expected to continue to rise due to the ongoing supply shortage.
In the domestic market, coffee prices continue to rise. Specifically, as of September 15, coffee prices in Dak Lak have reached 66,600 VND/kg, 65,900 VND/kg in Lam Dong, and 66,400 VND/kg in Gia Lai. In Dak Nong, coffee is purchased at 66,900 VND/kg.
According to Mr. Thong, the world relies on Vietnamese coffee, which is the second-largest global source. However, Vietnam has experienced a coffee crop failure, leading to a scarcity in supply and a surge in prices.
In the final months of the year, as the new harvest season begins, coffee prices are expected to remain high due to increased demand, according to his forecast.
Leaders of the Vietnam Coffee-Cocoa Association (VICOFA) also acknowledge that coffee prices are at their highest in 30 years. However, coffee exports from August to October may decrease compared to the same period last year as stocks have been depleted.
Moreover, coffee production this year is estimated to decrease by 10-15% due to unfavorable weather conditions. However, coffee exports from now until the end of the year remain optimistic due to increasing demand and limited supply, according to VICOFA’s estimation.
The Ministry of Agriculture and Rural Development estimates that coffee exports for the entire year of 2023 will reach approximately 1.72 million tons, generating $4.2 billion in revenue.
Sourcing Coffee in Vietnam: A Rich and Flavorful Experience
Buyers looking to source coffee from Vietnam have various options, from collaborating with local coffee cooperatives to partnering directly with coffee farmers. This direct approach allows for more transparent and mutually beneficial relationships, benefiting both buyers and growers.
For buyers interested in sourcing coffee from Vietnam, there’s no better way to explore the country’s coffee culture than through tasting tours. These tours offer the chance to visit coffee farms, witness the coffee-making process, and sample a variety of coffee flavors. Popular coffee destinations like Buon Ma Thuot and Dalat provide excellent opportunities for such experiences.
While Vietnam offers numerous advantages for coffee sourcing, it’s essential to be aware of some potential challenges, such as fluctuating weather conditions, market price volatility, and the need for quality assurance. Working closely with local experts and suppliers can help mitigate these challenges.
In summary, sourcing coffee in Vietnam is a rewarding experience that allows buyers to access a wide array of coffee varieties, support sustainable practices, and establish valuable relationships with local coffee producers. With its rich coffee heritage and commitment to quality, Vietnam continues to be a promising destination for coffee sourcing in the global market.