“The prices soared to VND95,000 per kilogram in the domestic market, which has never seen before,” said Doan Huu Tue, CEO of My Viet International Group.

According to Tue, coffee supply was always plentiful this time last year, when harvesting had just finished. But now the inventory level at enterprises and the coffee volume stored by farmers are modest.

“We have to refuse orders for 600-700 tons of coffee beans, because we are not sure if we can collect coffee beans,” he said.

Analysts said that coffee prices have reached all-time high, but export companies signed future contracts some months ago at low prices. As a result, they now have only two choices, either collect coffee from farmers at high prices and incur losses, or cancel the deals and compensate for this.

The domestic prices were low at the times exporters signed contracts. But when they began collecting coffee from farmers, the prices began escalating. 

Some exporters said they placed orders with farmers and paid a deposit, but they still cannot collect coffee because farmers have broken the contracts.

Nguyen Ngoc Luan, founder of Meet More brand in HCM City, said that coffee prices have increased by twofold.

The current input coffee prices are at VND85,000-95,000 per kilogram, while enterprises signed contracts on collecting coffee at VND50,000-60,000.

“We dare not close deals with low-price contracts. The company is trying to hold out until June,” Luan said.

The director of a large coffee export company on March 22 told VietNamNet that he has canceled several contracts, because the more he exports, the bigger losses he will incur.

“The prices have skyrocketed, making it impossible to respond to the latest happenings,” he said. “The coffee volume stored in our warehouse is just enough to fulfill 60 percent of orders."

Coffee prices have soared in the international market. On March 22, Robusta coffee with delivery in May 2024 surged by $70 per ton on the London trading floor to $3,385, while products with delivery in July surged by $67 per ton to $3,288.

In the domestic market, coffee bean prices hit the VND95,000 per kilogram peak.

Chair of the Vietnam Coffee and Cocoa Association (Vicofa) Nguyen Nam Hai said the prices were around VND40,000 per kilogram this time last year.

With the production cost of VND35,000-40,000 per kilogram and the current selling price of VND95,000 per kilogram, farmers can pocket big money.

In contrast, exporters are worried as prices have escalated. Importers don’t want to share risks and adjust buying prices.

Demand high

Asked about coffee price prospects, Hai said prices would stand high.

Hai said global coffee output has decreased because of climate change. El Nino has caused droughts in coffee growing areas, resulting in an output drop everywhere, including Vietnam. 

In addition, many farmers had chopped down coffee plants to cultivate other crops after coffee prices remained low for a long time.

The situation is also getting more serious because of geopolitical conflicts and the tensions in the Red Sea. Shipping freights and other costs have escalated, prompting financial investors to hoard for speculation. This has contributed to pushing coffee prices up.

The strong purchasing power of investors has triggered automatic buy orders, pushing coffee futures prices to new record highs.

Vietnam’s inventory level of 2022-2023 was the lowest in history. Signs of coffee shortages first appeared in August 2023 and since then, prices have been increasing.

According to Hai, Vietnam is the biggest Robusta coffee supplier in the world, and global roasters still have high demand for Robusta. However, inventories are not high.

“I think both farmers and exporters will run out of coffee by the end of April,” he said, adding that export companies need to assess the situation thoroughly when negotiating futures contracts. 

The General Department of Customs (GDC) reported that Vietnam exported 200,000 tons of coffee in the first half of March, up 119.5 percent over the same period last year, worth $320 million.

Tam An