In March, the export price averaged $3,555 per tonne, up 8 per cent compared to February, yet surging 55 per cent on-year, the top level in the past six months. This brought Q1’s average coffee export price to $3,289 per tonne, up 48 per cent compared to one year ago.

In its coffee market report released late last year, US Department of Agriculture estimated that the world’s stockpile coffee volume had fallen to its lowest in the past 12 years.

In the 2022-2023 season, the world’s stockpiled coffee fell to 26.5 million bags of 60kg, down 16.7 per cent compared to the previous report, and 4 per cent compared to estimation.

In 2024, many organisations and experts believe coffee shortages would linger in the months ahead due to a number of reasons. Major supply sources in Southeast Asia are experiencing a decline in output due to unfavourable weather conditions and low prices in recent years, causing farmers to switch to other crops for higher profits. Robusta coffee production in Vietnam and Indonesia is forecast to shed by 5.8 million bags this year.

According to Vicofa, in the 2023-2024 season, Vietnam’s coffee output would fall to 1.6-1.7 million tonnes, lower than the 1.78 million tonnes in the 2022-2023 season. Compared to other coffee producing countries, Vietnam’s coffee area only ranks sixth, after Brazil with a total area approximating 1.9 million hectares, Indonesia with over 1.2 million ha, Colombia and Ethiopia with more than 800,000ha each, and the Ivory Coast with nearly 800,000ha.

Vietnam’s coffee industry, however, would continue to benefit as robusta coffee prices are forecast to remain high, even reaching its peak due to concerns about supply shortages.

A source from Intimex, Vietnam’s major coffee exporter, revealed that coffee prices fetch high right from the beginning of the season, showing that demand is huge in the face of limited supply.

“Vietnam has many advantages, at least until the end of April and early May, when Indonesia and Brazil start their harvest. It can be said that Vietnam’s 2023-2024 coffee season is the best performing in history,” said the source.

According to the International Coffee Organization, the global demand for robusta coffee continues to fetch high in 2024 and Vietnam would seize an advantage over Brazil in the next six months.

Industry experts believe that with the current price situation, the coffee industry would be within reach to hit $5 billion in total export value in 2024. However, with increasingly strict requirements from import markets, the local coffee industry needs to embrace solutions for sustainable development and traceability of origin, especially meeting the EU’s anti-deforestation regulations, said the Intimex representative.

In 2023, despite a drop of 9.6 per cent in the export volume, Vietnam still counted $4.2 billion in total coffee export value, up 3.1 per cent on-year thanks to higher export prices.

According to the Vietnam General Department of Customs, coffee was placed among the top five agricultural products in export value last year.

By the end of 2023, global coffee prices continued upward trend due to concerns about supply shortages from major coffee-producing countries. In addition, there are concerns about delays in supply when the Europe-Asia shipping route through the Suez Canal has been interrupted due to geopolitical tensions.

VIR