Brian Jeffrey
Vietnam’s Coffee Exports Set New Records
Vietnam’s coffee export industry is experiencing unprecedented success, setting multiple new records. This robust performance is now looking forward to a pivotal decision from the European Union (EU), which represents a market worth nearly $48 billion.
In October 2024, preliminary data from the General Department of Customs revealed that coffee exports totaled around 50,000 tons, valued at $292.7 million. Thus, the cumulative volume for the first ten months surged to nearly 1.2 million tons, with revenue reaching $4.6 billion. Despite a 10.8% drop in export volume, the value climbed by 40.1% compared to the previous year.
The average export price for Vietnamese coffee over the first ten months has reached approximately $3,981 per ton, a remarkable 57% increase from the same timeframe in 2023. This marks the highest price level seen in the past three decades of Vietnam’s entry into the global coffee market.
As reported by the Vietnam Coffee and Cocoa Association (VICOFA), the 2023-2024 coffee season (October 2023 to October 2024) is projected to see Vietnam exporting around 1.46 million tons of coffee, a decrease of 12.1% from the prior season. However, due to soaring coffee prices, revenue has jumped by 33%, totaling over $5.4 billion—the highest amount recorded to date.
Do Ha Nam, Vice President of VICOFA, emphasized that 2024 has been a remarkable year for Vietnam’s coffee industry, marked by Vietnamese coffee prices surpassing all others in the global market for the first time. Notably, prices for Vietnam’s Robusta coffee have even overshadowed those of Arabica coffee.
Experts view 2024 as a “miraculous year” for the coffee industry, with prices hitting record highs. The value of coffee exports has continuously increased; in January, the price was $3,054 per ton, and by October, it soared to $5,855 per ton, reflecting a staggering 91.7% rise in just ten months.
Domestic prices for coffee have similarly escalated. At the end of October last year, raw coffee bean prices were between VND 58-59 million per ton. By November 8 of this year, prices jumped to VND 105-106 million per ton, peaking at VND 131 million per ton at the end of April.
Cultivators in the Central Highlands affectionately call coffee the “ATM tree” due to its ability to generate significant profits.
Along with record-setting prices and income, Vietnamese coffee has become increasingly vital to the global market. Any decline in Vietnam’s coffee output substantially influences worldwide prices.
As the harvest season begins, VICOFA anticipates a rebound in exports during the year’s last months due to seasonal increases in both supply and demand.
However, the Vietnamese coffee sector is currently awaiting a significant decision regarding the EU’s Anti-Deforestation Regulation (EUDR).
Vietnam exports coffee to over 80 destinations worldwide, with the EU constituting about 38% of its total coffee exports each year.
The EU is the largest coffee importer globally, accounting for 33-35% of the market. In 2024, coffee consumption within the EU is expected to reach almost $48 billion, anticipated to rise to over $58 billion by 2029. Thus, any import policy shifts in the EU could have immediate effects on coffee prices.
According to the EUDR schedule, starting December 30, 2024, exporters must provide evidence that their agricultural products, including coffee, are not associated with deforestation to sell in the EU.
The EU’s forthcoming coffee import regulations have already raised concerns regarding potential changes in market supply and demand, as indicated by the surge in coffee prices throughout 2024.
EU nations are hastily importing coffee to secure their supplies before the December 30 deadline, leading to increased global prices and a short-term imbalance in supply and demand, along with declining production from major coffee-growing countries.
In October, the European Commission proposed extending the EUDR implementation by one year, a suggestion endorsed by the European Council but opposed by environmental advocates. The European Parliament is set to vote on the EUDR timeline on November 13-14.
If the EUDR remains unchanged, importing nations are expected to increase their purchases in the remaining months of 2024, which may support coffee prices through the end of the year.
Conversely, if the EU delays the EUDR’s implementation, coffee supply and demand might stabilize temporarily, bolstered by Vietnam’s upcoming coffee harvest for the 2024-2025 season. In such a scenario, global coffee prices could likely fall below $4,700 per ton, while domestic prices may hover between VND 100,000-110,000 per kilogram.
Do Ha Nam remarked that Vietnam has been proactive in preparing for the EUDR, ensuring that most exporters are equipped to comply with the new standards promptly.
Recently, European importers have emphasized purchasing Vietnamese coffee ahead of the EUDR deadline, positioning Vietnam as a leading supplier capable of meeting EUDR standards. This has contributed to the rise in Vietnamese coffee prices to unprecedented levels globally.
If the EUDR takes effect as planned, the Vietnamese coffee sector stands to gain significantly from increased prices as a new harvest season approaches, with exports projected to exceed one million tons, as highlighted by VICOFA leadership.
