Viet Nam coffee growers warned of gloomy future

Coffee prices have fallen dramatically, and some farmers are giving up because of problems because of price fluctuations and supply-demand imbalances.

Robusta coffee prices, for example, dropped by 4-5.8 percent on January 31 in comparison with December 31, 2019.

The lowest Robusta price level of VND30,300 per kilogram was seen in Bao Loc and Di Linh districts of Lam Dong province, while the highest price of VND30,900 per kilogram was in Dak Ha district of Kon Tum and Cu Mgar district of Dak Lak.

At storehouses in HCM City, Robusta R1 price dropped by five percent to VND32,300 per kilogram.

Coffee exports have seen decline in both quantity and value. The General Department of Customs (GDC) reported that Vietnam exported 1.54 million tons of Robusta in 2019, worth $2.33 billion, down by 3.9 percent in quantity and 15.2 percent in export value compared with the year before.

Coffee exports have seen decline in both quantity and value. The General Department of Customs (GDC) reported that Vietnam exported 1.54 million tons of Robusta in 2019, worth $2.33 billion, down by 3.9 percent in quantity and 15.2 percent in export value compared with the year before.

Though Germany continues to be the biggest buyer of Vietnam’s coffee (239,700 tons in 2019, an increase of 0.4 percent with the average price of $1,487 per ton, valued at $356.49 million), its import value decreased by 11.5 percent in comparison with 2018.

Vietnam only could increase exports of processed coffee (41.58 million tons, worth $199.6 million, up by 10.2 percent in quantity and 5.6 percent in value compared with 2018).

The hope that the coffee price would recover in 2020, when demand increases as people change consumption habits and the population increases, may not happen.

The coffee exports in January 2020 continued to decrease sharply compared with December 2019 and January 2019 (140,000 tons, worth $245 million) to 140,000 tons, worth $245 million, down by 25.6 percent in export volume and 25.2 percent in comparison with December 2019, and down by 30.3 percent in value in comparison with January 2019.

The average export price in January 2020 was $1,751 per ton, an increase of 0.6 percent compared with December 2019 and 0.4 percent compared with January 2019.

Some processors have decided to store goods and wait for the price increase, while most farmers have either reduced their growing area or sold coffee gardens at a loss.

As one of the leading coffee exporters in the world, Vietnam aims to raise coffee export turnover to over $3 billion. However, analysts warned that the plan cannot be implemented in short term. Selling prices that have been lower than production costs have forced producers to scale down investments, and cut growing areas and output.

The Ministry of Agriculture and Rural Development (MARD) reported that there were 692,600 hectares of coffee growing area in 2019. The figure is expected to decrease to 600,000 hectares to ensure an average yield of 2.7-2.9 million tons per hectare.