Introduction:As a leading global exporter of coffee and pepper, Vietnam has recently been grappling with a wave of cargo theft at its ports. Multiple incidents at Qui Nhon Port have led to the loss of over 19 tonnes of goods, causing significant financial damage to businesses. Compounded by drought triggered by the El Niño phenomenon, coffee and pepper production in Vietnam has declined, further driving up export prices. This article delves into the full story, the impact on the industry, and how Vietnamese exporters are responding to the credibility crisis and shifting market conditions.

Vietnam is one of the world’s key exporters of coffee and pepper, but a recent spate of cargo thefts at its ports has drawn heightened international attention. Reports indicate that several incidents involving the theft of coffee beans and pepper occurred at Qui Nhon Port in Vietnam, affecting multiple companies with total losses exceeding 19 tonnes. Such incidents not only result in direct financial losses for businesses but also pose a challenge to Vietnam’s overall trade credibility.

The persistent drought caused by the El Niño phenomenon has had a notable impact on crop growth in Vietnam. Although the rainy season began in May, the rainfall was insufficient to offset the damage caused by the drought. As a result, in the first five months of 2024, Vietnam exported 114,400 tonnes of pepper, a year-on-year decrease of 13.2%. However, the export value reached $493 million, up 20.6% year-on-year, indicating that rising prices offset some of the decline in volume.

In the case of coffee, Vietnam’s production has also been affected by the drought, leading to a drop in exports. According to data from the General Department of Vietnam Customs, Vietnam’s coffee exports in May 2024 amounted to 79,358 tonnes, a sharp month-on-month decline of 47.8%. For the first five months of 2024, total exports reached 817,514 tonnes, down 5.8% year-on-year. Due to tightened supply, local coffee purchase prices in Vietnam have surged to between VND 118 million and VND 120 million per tonne, remaining persistently high.

Notably, the recent cargo theft incidents at Qui Nhon Port involved losses of approximately 10.3 tonnes of coffee beans and 8.2 tonnes of pepper, with a total value of around VND 2.7 billion. According to the Vietnam Pepper and Spice Association (VPSA), these thefts have occurred sporadically since September 2023, with a total of eight batches of cargo affected so far, including four batches of pepper and four batches of coffee beans belonging to five companies.

It is understood that the proportion of goods lost ranged from approximately 7% to 28% of the total shipment volume, all concentrated in the unloading area at Qui Nhon Port. The most severe loss involved over 4.6 tonnes of coffee beans. Companies typically discovered the shortages only after receiving feedback from their overseas partners, prompting internal investigations. Preliminary comparisons found that the container weight records at the factory during loading matched those upon arrival at the port, leading to suspicions that the damage may have occurred during the unloading process while waiting for export.

In response to the situation, Saigon Newport Corporation, which operates Qui Nhon Port, stated that goods go through multiple stages from leaving the factory to reaching the importer’s warehouse, including sea transport, unloading operations, and overland transport after arrival at the port. Therefore, it advised relevant companies to thoroughly verify their supply chain processes to avoid misunderstandings and unnecessary reputational harm.

The Vietnam Pepper and Spice Association further pointed out that such cargo loss incidents could expose exporting companies to risks of compensation or penalty payments for breach of contract, resulting not only in direct financial losses but also potentially affecting future collaborations with international buyers. Especially in the current context of tight market supply, reputational damage has even more profound implications for Vietnamese exporters.

Additionally, as Brazilian Robusta coffee enters its harvest season—with progress now at 51% and exports gradually increasing—it is partially filling the market gap caused by reduced production in Vietnam and Indonesia. At the same time, the Red Sea crisis impacting Eurasian shipping routes has led many traders to turn to Brazilian-sourced Robusta coffee beans, further affecting Vietnam’s market share.

It is worth noting that Vietnam’s coffee industry had already faced a trust crisis due to issues such as farmers withholding sales or breaching contracts by refusing to sell. Now, with the added issue of cargo theft at ports, the international reputation of Vietnam’s coffee and pepper has taken another hit, which will be detrimental to the stable development of agricultural product exports in the long run.

The above content is compiled by CoffeeHunters, a coffee news website.