Vietnam Coffee exports set a record in May and the first 5 months of 2023, which benefits

DNHN - May and the first five months of 2023 saw record exports of coffee from Vietnam. Despite fluctuations in price and supply, the outlook for coffee exports remains optimistic.

In May, exports of coffee from Vietnam reached a new high with a volume of 165,000 tonnes and a value of $396 million. In the first five months of 2023, the total volume and value of coffee exports reached a remarkable 882,000 tonnes and 2.02 billion USD. Despite a 2.2% year-over-year decline in coffee export volume, the export value increased by 0.2%. This indicates that the export value target of USD 4 billion for coffee in 2022 has been gradually missed.

In May 2023, the prices of Robusta and Arabica coffee fluctuated inconsistently. While the price of Robusta coffee increased, Arabica coffee prices fell. This fluctuation is attributable to supply and demand forecasts. Robusta coffee production decreased while Arabica coffee production increased. This trend is anticipated to continue as Robusta coffee demand increases in the future, especially in light of inflation. Robusta coffee continues to be in high demand, meeting the needs of the instant coffee industry.

Mr. Do Ha Nam, Vice Chairman of the Vietnam Coffee and Cocoa Association (VICOFA), stated that the constant increase in coffee prices is due to a lack of supply and demand. Forecasts indicate that the outlook for coffee exports remains optimistic as demand rises and supplies improve. Due to unfavorable weather conditions, coffee production is expected to decrease by 10 to 15% this year. This could put farmers and coffee exporters under stress.

Nonetheless, not only farmers but also several exporters do not benefit from the increase in coffee prices. The volatility of the coffee market, particularly the high financial costs, has discouraged Vietnamese companies from stockpiling.

The rise in coffee prices is not only detrimental to farmers but also to domestic coffee roasters and processors. Small roasting facility owner in Ho Chi Minh City. According to Hanoi, the cost of coffee beans has increased from 55,000 VND/kg to 68,000 VND/kg. Because it has fixed the wholesale price of roasted and ground coffee at VND 120,000/kg based on the initial price of raw materials, this company has difficulty adjusting the prices of its finished goods. This is made more difficult when domestic purchasing power is low, making it difficult to increase retail prices. Additionally, the proprietor of this establishment stated that this increase in coffee prices has harmed and even jeopardized the livelihoods of farmers and roasters in the country.

Also of concern is the state of reserved coffee among the populace and agents. Currently, the supply of coffee amongst the populace and agents is nearly depleted. The majority of coffee is stored in warehouses owned by foreign companies with significant financial potential. This creates a stark disparity between those who have benefited from coffee's record price increase. Foreign firms with substantial capital are the primary beneficiaries of the rise in coffee prices, while domestic firms and roasters are experiencing difficulties because they cannot purchase raw materials.

According to Le Duc Huy, the General Director of Dak Lak 2-9 Import-Export Company Limited (Simexco Dak Lak), the majority of businesses only buy and sell immediately, gaining little from price increases. This.

The current trend of rising coffee prices could result in the expansion of coffee-growing regions. However, Mr. Le Duc Huy also cautioned that according to new European Union (EU) regulations, coffee products originating from deforested and degraded forest areas will not be exported to this market after December 30, 2020. Therefore, it should be noted not to plant on land areas at risk of deforestation to prevent future harm to Vietnam's coffee exports.

May and the first five months of 2023 saw record exports of coffee from Vietnam. Despite fluctuations in price and supply, the outlook for coffee exports remains optimistic. However, not all coffee exporters and producers benefit from the price increase. To protect Vietnam's coffee export market in the future, it is necessary to ensure that coffee cultivation does not have negative environmental impacts or violate international regulations.

Phu Thanh