July 10, 2025 | 07:13 GMT +7
July 10, 2025 | 07:13 GMT +7
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Coffee drying at a farm in the Central Highlands. Photo: Son Trang.
The price of green coffee beans from the Central Highlands region surpassed 90,000 Vietnamese dong per kilogram for the first time on March 7, nearly doubling compared to the same period in 2023 at less than 50,000 Vietnamese dong per kilogram. At the beginning of this week, the price of Vietnamese coffee was estimated at 91,000 Vietnamese dong per kilogram.
After setting a new record of 75,000 Vietnamese dong per kilogram in 2023, the upward trend in coffee prices in Vietnam showed no sign of slowing down. Namely, the price of green coffee beans in Vietnam exceeded 60,000 Vietnamese dong per kilogram in October 2023, which is the beginning of the 2023/2024 crop. According to Mr. Do Ha Nam, Vice Chairman of the Vietnam Coffee Cocoa Association (VICOFA), the high levels of coffee prices seen at the beginning of the crop were unprecedented in previous coffee seasons.
Following this surge, coffee prices continuously trended upwards, with the most notable increase recorded at the beginning of 2024. During the first quarter of 2024, coffee prices have consistently exceeded the 80,000 and 90,000 Vietnamese dong per kilogram milestones, with the potential to increase even further.
The sharp increase in coffee prices can be primarily attributed to the decline in yield in contrast with demand. VICOFA estimated that there is a decrease of at least 10% in terms of coffee yield compared to that of the previous crop, down to 1.6 million tons. This drop in production is the result of the shrinking coffee-growing areas as farmers gradually transition to growing durian. Most notably, farmers are also cutting down coffee trees within coffee-durian intercropped farms in order to comply with China's requirements for durian exports, which prevent durian from being intercropped with other trees. Farmers currently stand to generate more profit from durian farming compared to that of coffee; consequently, durian became the preferred choice for the majority of farmers.
Businesses failing to procure sufficient coffee to fulfill orders for the 2023/2024 crop is also exerting a significant influence on the sudden increase in coffee prices. According to Mr. Phan Minh Thong, Chairman of the Board of Directors of Phuc Sinh Coffee Joint Stock Company in Ben Cat town, Binh Duong province, a shortage of coffee in Vietnam was previously believed to be an impossible scenario. However, after May 2023, the supply of coffee in Vietnam began to be exhausted. Consequently, coffee procurement has become relatively challenging. Factories were forced to consistently raise prices and acquire very limited quantities of coffee.
Vietnam's coffee production in the 2023/2024 crop is projected to decrease by 10%. Photo: Son Trang.
Despite the limited supply of coffee, businesses continue to receive a considerable number of export contracts. This discrepancy has led multiple businesses to increase their procurement of coffee to settle old orders as they prepare for the 2023/2024 crop. As a result, coffee prices soared at the beginning of the year, exacerbating the scarcity of coffee in Vietnam earlier than usual, starting as early as February. Farmers and distributors are withholding approximately 30% of the 2023/2024 crop yield in anticipation of further price increases, thereby contributing significantly to this scarcity.
Robusta coffee prices on the world market have also surged due to concerns regarding the declining supply in Asia and tensions in the Red Sea. The stagnated production of Robusta coffee is also prevalent in other Asian countries outside of Vietnam. Namely, Indonesia's coffee harvest for the 2023/2024 crop is estimated to decrease by 16.6% compared to that of the previous crop, down to only 10 million bags. This reduction has been attributed to the excessive amount of rain between April and May 2023, resulting in heavy damages to the coffee beans. The Indonesian government reported that coffee exports in January 2024 decreased by 80% compared to the same period in 2023, resulting in a total export of over 1.935 million bags for the first ten months of the current coffee season (between April 2023 and March 2024). This is a decrease of more than 2.687 million bags, which is equivalent to a 61% decrease compared to the same period in the previous crop.
In the past week, the forward prices of Robusta coffee on the London exchange have reached at least 3,460 USD per ton. According to traders in the coffee industry, this is the highest price recorded within past 16 years.
Translated by Nguyen Hai Long
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