Coffee prices decline after months of rise

By Thi Ha   May 10, 2024 | 06:26 pm PT
After rising relentlessly for four months, coffee prices have fallen by 24% in May to VND102,000 (US$4) per kilogram.

Lam Thanh Dung, a coffee trader in the Central Highlands, said prices are falling due to increasing global and domestic supply.

It has rained in the Central Highlands, which means the coffee output would be higher than previously estimated, he said.

The Vietnam Coffee and Cocoa Association said the rain in early May has eased worries about supply coffee growers, management agencies and businesses had.

A long drought had caused coffee trees to dry, even die, leading to fears that output would decrease by at least 20%, it said.

Global supply is also increasing. In May harvests began in Brazil, the world’s largest coffee producer.

Meanwhile, on international trading floors, both investors and speculators sold coffee, causing prices to fall.

According to Vietnamese firms, coffee prices have declined but remain high, and so they plan to only buy gradually and not in large volumes.

Prices would keep falling but are unlikely to go below VND70,000 per kilogram, they said. Coffee growers benefit greatly when prices are above VND100,000.

A report by the Ministry of Agriculture and Rural Development said in the first four months of the year Vietnam exported 756,000 tons of coffee worth nearly $2.6 billion, up 5.4% and 58% year-on-year. The average export coffee price reached $3,402 per ton, up 50%.

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