Farmers’ selling price of coffee has increased 20 times compared to 2001, while export coffee prices have increased more than 10 times. Currently, coffee trees are being competed by three types of trees: pepper, avocado and durian, but the main competitor is durian.
Low profits make it difficult to encourage farmers to keep coffee gardens
Mr. Do Ha Nam, Vice President of the Vietnam Coffee-Cocoa Association (Vicofa), said that in 2001, coffee prices dropped to 3,000 VND/kg, and export coffee prices were 300 USD/ton. Faced with unstable coffee prices, farmers have had to cut down coffee trees.
This is the lowest price in the history of the coffee industry, but today the price of coffee has increased very high, last week people sold it for 70,000 VND/kg, compared to 2001, the price of coffee has increased by more than 20%. time. The price of coffee on the London floor is 2,800 USD/ton, and the real selling price is about 3,000 USD/ton, so compared to 2001, the export price of coffee has increased 10 times.
“Exported coffee output in the past 10 months decreased by 10.7%, but the selling price increased by 3.4%, and the real price increased by 8%, while the total selling price difference increased from the beginning of the crop to the peak. The highest increase is 70%, showing that the price increase is real but the benefits for farmers are not much,” Vice Chairman Vicofa said.
Mr. Nam added that when the price started to increase, people rushed to sell until the coffee price increased to 60,000 VND/kg, then everyone sold out, so from May to September 2023, the coffee supply There is a shortage of coffee on the market, many businesses do not buy enough goods to deliver to signed contracts, and to maintain trust, they are forced to buy at prices higher than the selling price delivered to customers. This is an unprecedented situation in the coffee industry, and is also a lesson for everyone to behave in the future, especially in the 2023-2024 crop year.
According to many people, the coffee area has decreased significantly, so the number of 720,000 hectares of coffee that the Ministry of Agriculture and Rural Development of Vietnam previously announced may no longer be appropriate, and to have a specific number Vicofa is proposing that the Ministry reconsider the coffee area.
Because currently, coffee trees are being competed by three types of trees: pepper, avocado and durian, but the main competitor is durian trees, because the profit people earn from durian trees is about 500 million to 1 million. billion VND/hectare, while the profit from coffee trees is only about 200 million VND/hectare, so it is very difficult to get farmers to keep coffee gardens.
Will the shortage of exported green coffee repeat in 2024?
Vietnamese coffee has just entered the harvest season and according to Vicofa, the 2023-2024 coffee crop has a good harvest but due to reduced area, output will not increase.
Meanwhile, farmers need to sell to cover crop costs and especially the upcoming Lunar New Year, but there are few buyers so it seems that supply is exceeding demand, with the desire to sell at a high price. , fearing that the price will drop for too long makes people want to sell quickly and sell out all the coffee they have on hand. So, will it lead to a shortage of exported green coffee like in 2023?
Answering this question, Mr. Nam said that this issue depends on the decision of the farmer, and there are two cases: If people think that coffee prices will still increase, then only those who really need the money will Just sold, the remaining people will keep the coffee and businesses will not worry about lack of exported coffee like the 2022-2023 crop year.
In case people think that coffee prices will go down and decide to sell them all, the shortage of exported coffee like this year will appear again in 2024.
“The phenomenon is like that, but in fact, because farmers need money, they are stepping up sales and it seems that speculators are trying to limit buying to force down the price of Vietnamese coffee, not because the market is oversupplied. After the Lunar New Year, when the need for money is no longer high, people will limit sales, rich households store goods, so it is possible that after Tet, coffee prices will increase again”, Vice Chairman of Vicofa analyzed.
Also according to Mr. Nam, in addition to the main European market, each year China imports about 300,000 tons of green coffee from Vietnam. Chinese people born in the 90s of the last century love to drink coffee, so the growth is growing. This country’s coffee consumption is about 35% per year. China already has 4 instant coffee processing factories but the shortage is still very serious and so they really need to buy Vietnamese coffee.
“Even though we have invested in building many instant coffee processing factories, there is still not enough supply, so China has to import to supplement the market. China’s demand for green coffee and instant coffee is increasing and this country is a close market, which will open up great opportunities for Vietnam to boost exports of green coffee and instant coffee to a market of more than billions. this people,” Mr. Nam said.
Source: Nguyen Huyen https://cuocsongkinhdoanh.vn/