With scarce supply, coffee prices scale new peak in Vietnam

Scarce supply has seen coffee prices rise steadily in Vietnam, reaching a new high of about VND103,000 ($4.1) per kilogram Thursday morning in the Central Highlands, the nation’s coffee hub.

The price, recorded in the provinces of Dak Lak, Dak Nong, Gia Lai and Kon Tum, rose by VND1,200-1,300 ($0.05) per kg on Thursday morning. That was more than double the same period last year and almost 12% higher than the previous month.

The price hikes have followed a global trend. The price of robusta coffee on the London exchange for May delivery has reached $3,802 per ton; while Arabica on the New York floor has risen to more than $4,500 per ton, an all-time high.

Exporters believe that Vietnamese robusta coffee has a relatively solid and irreplaceable position in the world market. With a shortage of supply, Vietnamese coffee beans are much sought after by foreign roasters, pushing up prices, they say.

In the domestic market, traders are finding it difficult to get the beans because supply is limited and many investors have already "scrambled" the item.

The Ministry of Agriculture and Rural Development has reported that Vietnam exported 799,000 tons of coffee in the first three months of the year, earning $1.9 billion. While the export volume marked a year-on-year increase of more than 44%, each ton of coffee exported earned $3,181, a 43.5% increase year-on-year.

Nguyen Quang Binh, a coffee expert, said 2024 was likely to be a year of price breakthroughs, though coffee prices are unlikely to rise further to $5,000-7,000 per ton in the near future.

“So Vietnamese firms may find that coffee prices will eventually revert to a certain level because they cannot remain high indefinitely, necessitating a long-term solution for sustainable development," he added.