Coffee Prices Rise to a Five-Year High in Vietnam

Coffee Prices Rise to a Five-Year High in Vietnam

Coffee bean prices in the central province of Dak Lak, Vietnam’s largest coffee growing area, have reached a level unseen for five years, at VND16,200 a kilo on May 16 from VND11,000 a kilo in late February this year as the prolonged drought in the region looks set to cut output heavily.

Meanwhile, the FOB export price of coffee products at Saigon Port also rose to US$920 per ton of grade one and US$860 a ton of grade two, up by US$25 a ton against early March this year.

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.

This is the first time in the past 5 years, the coffee prices have returned to around VND15,000 a kilo, the profitable level for local coffee farmers. 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.

Coffee traders forecast that prices of Vietnamese coffee beans will go up sustainably this year. (US$1=VND15,799).

Vietnam, the world's largest robusta coffee exporter, shipped around 385,000 tons of coffee products worth around US$425 million in the first four months of this year, down 5.4 per cent on-year in volume and up 2.6 per cent on-year in value, according to the Government Statistics Office.

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