Vietnam's coffee prices has the potential to be highest in the world in 2024

The 27th annual Asia International Coffee Conference was held in Ho Chi Minh city on December 5. The conference primarily focused on summarizing the state of global coffee production in the 2022/2023 crop and outlining development directions for the 2023/2024 crop.

According to Mr. Nguyen Nam Hai, Chairman of the Vietnam Cocoa - Coffee Association (Vicofa), data from the International Coffee Organization (IOC) indicates that the total global coffee yield in the 2022/2023 crop reached 171.3 million bags at 60 kilograms per bag, marking an increase of 1.7% compared to the 2021/2022 crop. Additionally, the total coffee yield in the Asia-Pacific region reached 49.7 million bags, accounting for 29% of the global total coffee yield.

Despite the rapid increase in yield, global coffee exports declined. Namely, global coffee exports reached 110.8 million bags during the 2022/2023 crop, marking a decrease of 5.5% compared to the 2021/2022 crop. Export reductions were observed across all coffee-producing regions, with the Asia-Pacific region experiencing the smallest decline at 0.9%, reaching a total export of 43.56 million bags and constituting over 35% of the global total coffee export volume.

Several factors contributed to the global decline in green coffee exports. Primarily, the unfavorable global macroeconomic environment failed to promote consumer confidence. Rising inflation levels, in combination with high interest rates in key economies and increased living costs have effectively reduced available income for the majority of countries worldwide.

Similarly, Vietnam's export of green coffee also experienced a considerable decline in 2023, with a projected year-end decrease of 15%. Conversely, the price of green coffee in Vietnam is expected to rise sharply in 2023, with the potential of reaching up to 70,000 Vietnamese dong per kilogram. However, Mr. Do Ha Nam, Chairman of the Board of Directors of Intimex Group, assessed that the high prices will not benefit coffee farmers, who sold the majority of their harvest in large quantities when the price reached 50,000 Vietnamese dong per kilogram.

The 2023/2024 crop has been evaluated to pose numerous challenges and difficulties for the global coffee industry. Accordingly, climate change and adverse weather conditions will significantly impact global coffee supply, leading to a reduction in both yield and quality.

According to Mr. Nguyen Nam Hai, Vietnam is currently in the process of harvesting its latest 2023/2024 coffee crop, with approximately 50% of the yield harvested. Due to unfavorable weather conditions, Vietnam's total coffee yield is expected to decrease significantly in the 2023/2024 crop.

With the combination of reduced yield and increased domestic consumption, Vietnam's export of coffee in the 2023/2024 crop is projected to continue its downward trend, with an estimated minimum of 1.4 million tons.

Notably, the price of Vietnamese green coffee reached an all-time high of 60,000 Vietnamese dong per kilogram at the beginning of the 2023/2024 crop. Mr. Do Ha Nam emphasized that this price range is unprecedented for the Vietnamese coffee industry. On the other hand, the London market also reported high levels of coffee prices.

Mr. Nam posited, given the shortage of coffee for businesses in June 2023, stakeholders within the industry can expect a depleted coffee supply as early as May or even April 2024.

As a result, European countries may depend heavily on Vietnam's export of Robusta coffee until April 2024. Consequently, there is a high likelihood that Vietnam's coffee prices will continue to rise and reach the highest in the world in 2024.

According to Mr. Nguyen Nam Hai, the global coffee industry must be developed in association with green growth in the context of rapidly declining coffee production. Accordingly, the global coffee industry must establish an appropriate action plan from the beginning of the 2023/2024 crop in compliance with the European Union's regulation on deforestation-free products (EUDR), mechanisms governing the boundaries of carbon credits, and the certification of carbon credits. The phased implementation of these programs will demonstrate the global coffee industry's commitment to environmental protection, nature conservation, and minimizing the adverse impacts of climate change.
As of December 6, 2023, coffee prices in both the domestic and global market have experienced a  considerable growth. Most notably, prices in the domestic market have risen by 600 Vietnamese dong to reach a range of 59,100 to 60,100 Vietnamese dong per kilogram.