(HQ Online) - Mr. Nguyen Nam Hai (photo), Chairman of the Vietnam Coffee and Cocoa Association, shared about the picture of Vietnam's coffee industry in the context of continuously rising prices.
Recently, the coffee market situation has had very hot developments, especially in terms of prices. Could you please share a few details about the picture of Vietnam's coffee industry today?
In the 2023-2024 coffee season and especially 2024, coffee prices have reached their highest level of all years. Currently, each ton of exported coffee costs around 4,000 USD and the price of domestic coffee is around 102,000 VND/kg. For many years, coffee prices have always been low, only equal to or lower than cost price, but in 2024 as well as the 2023-2024 crop year, coffee prices have increased very sharply. This has brought high profits to coffee farmers.
In the first quarter of 2024, Vietnam's total coffee export output reached about 600,000 tons with a turnover of 1.9 billion USD. This is also the highest level in recent years and this increase is due to coffee prices.
To maintain this result, Vietnam needs to develop sustainable coffee. Climate change is the first factor affecting the coffee industry. Over the past many years, not only Vietnam but all coffee growing regions globally, especially robusta coffee growing regions, have been greatly affected by climate change. This is also the most important factor affecting coffee productivity and output in the past crop year. The current problem is to ensure sustainability for the coffee industry from production to processing and export. In particular, we must create relationships between businesses and farmers to build quality coffee areas for sustainable development.
At current price levels, although farmers benefit, businesses are facing difficulties. So how should the story of sustainable development be implemented so that all elements in the chain from farmers to businesses benefit?
In the production, business and export chain coffee, every step needs to ensure sustainability. Recently, the Vietnam Coffee and Cocoa Association has issued warnings about buying far away and selling far away. For example, from October to December, coffee is harvested, but since August, businesses have purchased coffee, which will create very high business risks. Therefore, all businesses need to pay attention to business orientation to avoid buying far and selling far away.
In Vietnam's coffee supply chain, farmers do not sell directly to exporters but through a system of agents and traders. When coffee prices increased, a breakdown occurred at the traders' level. Therefore, the Vietnam Coffee and Cocoa Association has warned businesses, especially intermediary businesses such as agents and traders, to ensure reputation for Vietnamese exporters as well as foreign businesses. .
Coffee prices have been low for many years. What is the reason for the recent sharp increase in prices, sir?
There are many reasons why coffee prices increase. Firstly, in the recent 2022-2023 crop year, inventory reached the lowest level in many crop years. The 2023-2024 crop will start in October, but since June and July we have been short of goods, with no goods delivered to pre-sold export contracts. But when the season comes, coffee prices increase continuously, affecting the delivery of businesses.
The second is due to the impact of climate change, especially the dry El Nino phenomenon, which affects the productivity and output of global coffee, especially robusta coffee, which needs water.
Third, war and embargo affect global coffee consumption, causing coffee prices to rise.
Fourth, on the coffee floors, financial investors also focus on coffee products, just behind oil products, which is also one of the factors that have increased coffee prices in recent times.
The largest market for Vietnamese coffee is Europe, which has regulations prohibiting the import of products related to deforestation. What impact does this have on Vietnam and what solutions are needed in the future? Sir?
European regulations on combating deforestation and forest degradation take effect from June 2023. This is a regulation aimed at protecting nature and the environment. Therefore, the Vietnamese coffee industry in particular and the agricultural industry in general must support this regulation to demonstrate Vietnam's responsibility towards the goal of environmental protection and nature protection. This is a challenge but also an opportunity for the Vietnamese coffee industry to develop in the coming time.
Thank you Sir!
Source: Customs Online
