Arabica coffee prices set to enjoy bounce back in 2020

The price of Arabica coffee in 2020 is expected to undergo a rebound due to an overall decline in global coffee exports occurring simultaneously alongside an increase in the world’s overall demand for coffee, according to the Import and Export Department under the Ministry of Industry and Trade.

The department stated that the price of domestic robusta coffee experienced a downward trend in accordance with the world prices in December 2019.

According to statistics from the General Department of Vietnam Customs, Vietnam exported a total of 94,000 tonnes of robusta coffee with a value of US$142.49 million throughout November 2019. This figure represents a fall of 20.9 per cent in volume and 29.6 per cent in value in comparison with November 2018.

During the first 11 months of 2019, the country shipped 1.376 million tonnes of robusta coffee abroad, raking in US$2.081 billion in the process, down 6.4 per cent in volume and 18.1 per cent in value.

Most notably, robusta coffee exports to the United States, Japan, Belgium, Algeria, the United Kingdom, and India underwent an upward trend while exports to Germany, Italy, Spain, Russia, and the Republic of Korea experienced a downward trajectory.

The average export price of robusta coffee throughout the 11 month-period in 2019 reached US$1,512 per tonne, down 12.5 per cent in comparison with the same period from 2018.

Important figures achieved during 2019 were the average export price of robusta coffee to key markets such as the US, Germany, and Italy reaching US$1,476, US$1,482, and US$1,555 per tonne respectively.

Throughout the reviewed period, the nation exported 349,000 tonnes of processed coffee at a price of US$175.4 million, up 1 per cent in volume, and down 0.2 per cent in value against the same period during 2018.

Noteworthy figures include the exports of processed coffee to Russia, China, US, and Italy, which saw an upward trend of 57.6 per cent, 104.4 per cent, 9.2 per cent. and 24.1 per cent respectively, despite the exports of the product decreasing to Japan and ASEAN.

At present, the country’s coffee products are being exported to more than 80 countries and territories worldwide, accounting for 14.2 per cent of the world’s coffee export market, ranking second only after global powerhouse Brazil.

This can be seen as the nation’s roast and ground coffee exports currently make up 5.9 per cent of the market, ranking fifth after Brazil, Indonesia, Malaysia, and India.

With regard to commodity structure, the country’s coffee industry remains focused on exporting raw and unprocessed robusta coffee, accounting for 94 per cent of total exports. Despite this, the products have so far failed to secure a strong foothold in the global market as a result of low export value.

The Import and Export Department is forecasting a shift in commodity structure throughout 2020 as firms begin to focus on boosting the exports of processed coffee as a means of enhancing the export value and securing a foothold within the global market.