Coffee Prices Rise to a Five-Year High in Vietnam

Coffee Prices Rise to a Five-Year High in Vietnam

Coffee bean prices in Vietnam, the world’s largest robusta coffee exporter, have reached a level unseen for five years, at VND14,500 a kilo on March 9 from VND11,000 a kilo in late February this year as the prolonged drought in the Central Highlands look set to cut output heavily.

Meanwhile, the FOB export price of coffee products at Saigon Port also rose by US$95 to US$840 per ton of R2 glass and US$870-890 a ton of R1, from US$755 and US$775-795, respectively, at the end of last month, Vietnam Coffee and Cocoa Association (Vicofa) said on March 10.

The increasing coffee indexes were attributed to higher global prices and insufficient available supply of coffee beans due to dry weather in Vietnam. Farmers in Dak Lak, the country’s largest coffee growing area, are estimated to lose around 100,000 tons of coffee and only 220,000 tons will be produced this year.

Coffee traders forecast that prices of Vietnamese coffee beans will go up to VND20,000 a kilo in this crop and the export indexes will be as high as US$1,000 a ton.

For the past five years, Vietnam’s coffee prices have dipped to low levels, even lower than the production cost. In the past farmers had to sell coffee beans at around VND10,000 a kilo or even as low as VND6,000 a kilo while exporters fetched only US$600-650 a ton FOB basis, said the association.

Vicofa chairman Van Thanh Huy predicted that Vietnam’s coffee output in the 2004-05 crop, which runs from September 2004 to November 2005, would not exceed 700,000 tons, or fall to 22 per cent against the previous crop. The 2003-04 crop in Vietnam yielded 900,000 tons of coffee and earned US$565 million from exports totaling 867,616 tons at average prices of US$650 a ton.

Vietnam shipped around 172,000 tons of coffee worth US$115 million in the first two months of this year, representing a decrease of 5.2 per cent on-year in volume and 4.2 per cent on-year in value.

Saigon Times Daily