Vietnamese coffee has just had an unprecedentedly successful export season, setting multiple records. This strength in the sector is now awaiting a historic decision from the European Union (EU), a market valued at nearly $48 billion.

Record-breaking harvest

According to preliminary data from the General Department of Customs, coffee exports in October 2024 reached approximately 50,000 tons, with a value of $292.7 million. This brought the total export volume in the first ten months of the year to nearly 1.2 million tons, generating $4.6 billion. Although the volume of coffee exports fell by 10.8%, the value surged by 40.1% compared to the same period in 2023.

The average export price for Vietnamese coffee over the first ten months is estimated at $3,981 per ton, marking a 57% increase over the same period in 2023. This is a historic high in the past 30 years since Vietnam entered the global coffee market.

According to the Vietnam Coffee and Cocoa Association (VICOFA), for the 2023-2024 season (from October 2023 to October 2024), Vietnam exported around 1.46 million tons of coffee, a 12.1% decrease from the previous season. However, revenue rose by 33% due to record-high coffee prices, generating over $5.4 billion—the highest amount to date.

Do Ha Nam, Vice President of VICOFA, commented that 2024 has been an extraordinary year for Vietnam’s coffee sector. For the first time, Vietnamese coffee prices topped the global market. The price of Robusta coffee, Vietnam’s primary export, even exceeded that of Arabica coffee.

Both industry players and experts consider 2024 a “miraculous year” for Vietnam’s coffee industry, with prices reaching unprecedented highs. Vietnamese coffee export prices have consistently risen since the beginning of the year: in January, coffee was valued at $3,054 per ton, but by October, it had surged to $5,855 per ton—a 91.7% increase within ten months.

Similarly, domestic coffee prices have also skyrocketed. In late October of last year, prices for raw coffee beans ranged from VND 58-59 million per ton. By November 8 this year, they had risen to VND 105-106 million per ton, reaching an all-time high of VND 131 million per ton at the end of April.

In the coffee-growing region of the Central Highlands, coffee is affectionately referred to as an “ATM tree,” as it yields substantial profits for farmers.

In addition to record prices and export earnings, Vietnamese coffee has increasingly proven essential to global demand. Any drop in Vietnam’s coffee production has a significant impact on world prices.

As Vietnam’s coffee industry enters a new harvest season, VICOFA forecasts that exports will pick up again in the final months of the year due to seasonal increases in both supply and demand.

EUDR implementation could boost Vietnamese coffee prices

However, Vietnam’s coffee industry now awaits a historic decision tied to the European Union’s Anti-Deforestation Regulation (EUDR).

Vietnamese coffee is currently exported to over 80 countries and territories, with the EU accounting for about 38% of Vietnam’s total coffee exports each year.

The EU remains the world’s largest coffee importer, accounting for 33-35% of the global market share. In 2024, coffee consumption in the EU is projected to reach nearly $48 billion, with an expected increase to over $58 billion by 2029. Consequently, any major import policy changes in the EU will immediately affect coffee prices.

According to the EUDR timeline, from December 30, 2024, companies will be prohibited from exporting certain agricultural products, including coffee, to the EU unless they can prove that their products are not linked to deforestation.

The EU’s impending regulation on coffee imports has already stirred concern over potential shifts in supply and demand in domestic and international markets, reflected in the rise in coffee prices throughout 2024.

EU nations have rushed to import coffee to secure supply before December 30. Combined with declining production in major coffee-producing countries, this has driven up global prices and created a temporary supply-demand imbalance.

In October, the European Commission (EC) proposed delaying EUDR implementation by one year, a move quickly supported by the European Council (EUCO) but opposed by environmental groups. The final decision on the EUDR timeline will be voted on by the European Parliament on November 13-14.

If the EUDR timeline remains unchanged, coffee-importing nations will likely ramp up purchases during the remaining months of 2024, driving up demand. This increased demand could support coffee prices through the end of the year.

However, if the EU postpones EUDR implementation, coffee supply and demand will stabilize temporarily, supplemented by Vietnam’s new coffee harvest for the 2024-2025 season. In this case, global coffee prices would likely settle below $4,700 per ton, while domestic prices would range between VND 100,000-110,000 per kilogram.

Do Ha Nam noted that Vietnam has been the first country to proactively implement the EUDR, and most of the country’s exporters are ready to meet these standards as soon as the regulation takes effect.

In recent months, European importers have focused on purchasing Vietnamese coffee ahead of the EUDR deadline. Vietnam has nearly become the only coffee supplier positioned to guarantee compliance with EUDR standards, which has raised Vietnamese coffee prices to the highest levels globally.

If the EUDR is implemented as planned, Vietnamese coffee will benefit significantly from higher prices as the new harvest season begins, with exports projected at over 1 million tons, emphasized VICOFA leadership.

Tam An