Plentiful harvest drives coffee prices down by 20%

By Thi Ha November 8, 2024 | 06:58 am PT

Coffee prices in Vietnam, the world's largest producer of robusta coffee, have dropped by 20% from their peak in late April to VND106,000 ($4.2) per kilogram this week amid a good harvest in the Central Highlands.

Data from the Vietnam Coffee - Cocoa Association shows that prices in the Central Highlands, the country's largest coffee-growing area, have been sliding for five weeks.

Thuat, a coffee farmer in the Central Highlands province of Kon Tum, reported a 10% year-on-year rise in his yield this year while other farms in neighboring provinces, such as Lam Dong and Dak Lak, have also seen 5-10% increases.

Nguyen Nam Hai, president of Vicofa, said another factor driving down prices is the European Union’s decision to delay its deforestation prevention regulation, which would have required companies importing key agricultural products such as cattle, coffee, cocoa, and soy into Europe to map and trace their supply chains to prove they have not contributed to deforestation.

This has eased the pressure on the supply chain, he said, adding that farmers are still earning huge profits despite the falling prices.

Businesses expect prices to drop further as the harvest hits full swing. But the decline is likely to be short-lived as output this year is expected to be lower due to a reduction in growing areas. Hai expected a 10% decline from last year.

The Department of Crop Production reported coffee was grown on 718,000 hectares as of the end of last year.

Exports hit a record US$4.6 billion in the first 10 months of the year, a 40% year-on-year increase.

Shipments to some key markets like the Philippines and Malaysia surged by 2.2 times. The average export price was $3,981 per ton, up 57% from a year earlier.