2021 coffee exports to hit $3bln

Coffee exports reached 1.273 million tons worth $2.41 billion in the first ten months of the year. They are forecast to reach around 260,000 tons in November and December, which would bring in an additional $600 million and push export turnover to the $3-billion mark for the year as a whole.

The new harvest in the Central Highlands coffee region has begun, the soaring coffee prices are now at their highest levels in the past 5 years, making coffee farmers very excited.

The export price of coffee has also reached nearly 2,370 USD/ton, which is an opportunity for traders to seize the opportunity to boost exports, towards the 3 billion USD mark this year…

EXCITING COFFEE PRICE INCREASE

In the third quarter of 2021, social distancing activities due to the Covid-19 epidemic caused the supply chain of most agricultural products to be disrupted, leading to a decrease in prices of many agricultural products such as vegetables, fruits, and aquaculture. However, the disruption of the coffee supply chain does not reduce the price of this item, but on the contrary, pushes the price of domestic raw coffee to increase.

Generally, in the third quarter, the domestic coffee price increased by 12%, surpassing the mark of 40,000 VND/kg, and marked the end of the 4-year price reduction cycle in a row.

In October, the domestic price of robusta coffee continued to increase by about 2.5% compared to the end of September before the new harvest to 41,000 VND/kg.

In 10 months, Vietnam's average export coffee price reached 2,100 USD/ton – the highest level since December 2017. Currently, on November 3, the export price of coffee (FOB price - delivery price at Ho Chi Minh port) has reached 2,369 USD/ton, this is the highest price in the past 5 years.

Especially in the first two days of November, 2021, the domestic coffee price increased by 1,200 VND/kg, bringing the coffee price to 42,200 VND-42,300 VND/kg, the highest price in the past 5 years.

Mr. Do Ha Nam - Vice Chairman of the Vietnam Coffee - Cocoa Association said that the 10-year cycle of the coffee industry is returning. Coffee prices are forecast to peak at the end of the year.

However, for the price of coffee to return to its heyday of 46,000 - 47,000 VND/kg, much depends on the control of the Covid-19 epidemic, the speed of the world economic recovery and the weather of coffee-growing countries. big in the world.

In terms of export coffee prices, in 2011 the highest peak was 2,600 USD/ton, currently the price of coffee has only reached 2,370 USD/ton, still 230 USD short to reach the peak in 2011, so the price Coffee is still open to increase.

According to Mr. Nam, if coffee prices peak at the end of the year, it will be very good for farmers and the coffee industry in Vietnam, because every November is the coffee harvest season in the Central Highlands.

This time in Vietnam, the new normal situation with social distancing orders has been eased, promising that export traders will step up shipboard deliveries to make up for the stagnation of the past many months. .

However, according to forecast, the first export shipment signed after the distance will only be put on the ship leaving the port at the end of November, while at the port there are still millions of other bags of coffee that need to be delivered. guest.

The new harvest in the Central Highlands coffee region has begun, the high price of coffee is making coffee farmers very excited, However, the shortage of workers to increase the harvest is not a small problem. . Coffee growers expect local authorities to soon take measures to support the harvest of the new crop.

The Vietnam Coffee and Cocoa Association forecasts that coffee exports in the remaining 2 months will reach about 130 thousand tons, if the current high price is maintained, it can bring in an additional 600 million USD in 2 months. at the end of the year, to bring the whole year coffee turnover back to the threshold of 3 billion USD.

CIRCULAR YEAR OUTLOOK 2021-2022

In the world market, it is expected that coffee prices will continue to increase in the near future due to unstable supply, the market is worried about drought in South America and floods in Southeast Asia, in the context of prolonged epidemic and high transportation costs.

The cold spells and prolonged drought in Brazil have damaged many areas of the country's coffee trees, pushing up prices in recent times. According to the Brazilian Coffee Exporters Association (Cecafé), accumulated in the first three months of the 2021-2022 crop year, Brazil's coffee exports reached 8,817 million bags, down 20% compared to the first three months of the 2020-2021 crop year. In Brazil, many factors are supporting the price of coffee, that is, the Reais increased by 1.42%, the exchange rate increased to 1 USD = 5.5890 Reais.

Bad weather also affects Colombia's coffee harvest. In addition, the appearance of the "Mu" variant of the Covid-19 virus in this country could lead to prolonged social distancing/blockade policies, plus a labor shortage that could make the production situation worse. Colombian coffee exports will deteriorate further.

These factors contributed to the increase in robusta prices, combined with disruptions to the flow of coffee from Southeast Asia and high coffee transport costs, causing a sharp decline in the amount of robusta coffee stored in ICE stockpiles. .

Fewer coffee exports from Vietnam and a decline in output from other leading coffee producing countries have made coffee a "hot" commodity this year, with robusta prices up 52.2 % since the beginning of the year.

Consulting firm Fitch Solutions forecasts that coffee prices could remain high until 2022, not only because of a decline in harvests, but also because "demand for coffee, at least in Europe and the US, will increase. should increase in the coming months, when restrictions to combat Covid-19 are lifted, allowing cafes to reopen," said Fitch Solutions, the consulting firm, which raised its average coffee price forecast. Arabica coffee in 2022 from 1.25 USD/lb to 1.5 USD/lb.

While the coffee harvest season of countries in the Southern Hemisphere (Brazil, Colombia...) is usually from May to October, Vietnam harvests coffee from November every year to the end of April next year.

Thus, at this time, although Vietnam has begun to harvest coffee, it is in the position of "alone to one market", so success or failure in coffee export at this time is in the initiative of enterprises. For Vietnamese coffee, if you know how to regulate the quantity sold reasonably and you know how to negotiate with partners to achieve the most profitable price contract.

Experts recommend that, taking advantage of the current market with good prices, Vietnamese manufacturers should soon promote the introduction of new crops to the market. Because if later, when the Fed raises interest rates, and at the same time with Brazil's output next year, there may be a season that will push the price of coffee down.