Introduction:The price of Vietnamese Robusta coffee has recently surged to VND 720–73 million per ton, reaching a new high in recent years. Tight global inventories, disrupted Red Sea shipping routes, and farmers holding back sales have placed unprecedented fulfillment pressure on traders. This article delves into the multiple factors behind the price spike, explores future market trends, and helps coffee professionals and enthusiasts stay on top of key market movements.
According to the latest data from the Vietnam Coffee-Cocoa Association, Robusta coffee prices have continued to rise recently, with the market forecast range climbing to VND 72–73 million per ton, up from the previous level of around VND 71.5–72.5 million per ton. This upward trend is mainly driven by low global inventories, declining exports from producing regions, and transportation bottlenecks.
Currently, global Robusta coffee inventories are below 30,000 tons, while Arabica coffee stocks have also dropped to historic lows. Behind this tight supply is a decline in coffee production across multiple countries, leading to a sharp reduction in overall exports. Industry statistics show that although Brazil’s total coffee exports in 2023 only fell slightly by 0.4%, Robusta coffee exports actually grew by 212% against the trend, with imports into the Chinese market more than doubling, indicating strong demand.
Meanwhile, India, another major Robusta-producing region, is expected to see its coffee exports potentially increase by as much as 10% in 2024. This is largely because rising global coffee prices have encouraged European buyers to pay higher premiums to secure stable supplies from India.
However, ongoing turmoil in the Red Sea region has severely disrupted global coffee shipments. Transit times have been extended by two to three weeks, and some shipping companies have had to reroute via the Cape of Good Hope, with some even considering charging customers a “war risk surcharge.” Due to frequent attacks on ships by Houthi militants near the Suez Canal, freight costs for exporting Robusta coffee from Vietnam have risen sharply. Many international buyers are now turning to Brazil for imports, as shipping costs from Brazil are relatively lower and transit times shorter.
It is worth noting that although the United States and the United Kingdom have attempted to stabilize the situation through diplomatic means, the effects so far have been limited, and the Red Sea crisis shows signs of worsening, further increasing uncertainty in the global coffee supply chain.
On the supply side, Vietnamese coffee farmers are also holding back their inventory in anticipation of higher future prices, hoping to sell at better rates. This wait-and-see mentality has left many traders struggling to fulfill pre-sold contracts, with some even facing serious default risks.
Vietnamese media reported that Mai Cau, a well-known coffee agent in Dak Nong Province, has declared bankruptcy. The company’s director, Tran Thi Mai, stated that nearly US$1 million worth of goods remain undelivered. This incident primarily stems from traders having previously signed pre-sale contracts with buyers, but local Vietnamese farmers were unwilling to sell coffee beans at current prices, preventing traders from securing timely supplies and ultimately failing to meet their contractual obligations, facing huge compensation claims. Even opting to purchase at higher prices could not avoid losses.
The Vietnam Coffee-Cocoa Association also pointed out that during November 2023, Vietnam exported a total of 120,000 tons of coffee beans, but about half of that was used to fulfill old orders from the previous season. The association estimates that up to 80,000 to 150,000 tons of coffee beans from this season may not be delivered on time, and these orders may have to be gradually fulfilled in the next season.
The above content is compiled by CoffeeHunters, a coffee news website.
