Many agricultural product prices at record levels on low supply, strong demand

Coffee prices have now surged to VND114,000 (US$4.48) per kilogram from VND70,000 early this year and doubling and even tripling from the same period last year.

Durian and cocoa prices also rose to all-time highs in the first quarter after doubling in March from January. Prices of monthong durian skyrocketed to VND230,000 per kilogram, while fresh cocoa rose to VND7,000-8,000 in March.

On the global market, coffee, cocoa and pepper have risen to record highs. Arabica coffee is at $5,100 per ton at the New York Mercantile Exchange.

Vietnamese farmers attribute the jump in prices to soaring exports. Durian and coffee have fetched them the highest profits with their prices shattering record after record.

Loan, a farmer in the central highlands province of Gia Lai, said: "This year my family harvested six tons of coffee beans per hectare. With good prices, we have made a profit of some VND400 million."

Hoang Anh Tuan, a trader who buys agricultural produce in the Central Highlands, said: "Coffee, durian and cocoa prices increased relentlessly in the first quarter and exceeded all forecasts."

Nguyen Nam Hai, chairman of the Vietnam Coffee and Cocoa Association (Vicofa), said the higher prices were due to the low supply since the 2022-2023 crop year, with coffee inventories being at their lowest ever.

The shortages persist and are also occurring in many other coffee producing countries.

According to statistics from the Department of Crop Production, Vietnamese coffee, cocoa and pepper growing areas have been gradually shrinking due to years of falling prices as many farmers in the Central Highlands and Mekong Delta switched to durian and other crops.

There were 656,000 hectares of coffee in 2022, down 5% from 2019. The area under cocoa had fallen to 3,481 ha from 10,000 ha in 2013.

Hai said drought caused by El Nino and geopolitical tensions in the Red Sea region have also driven up the prices of agricultural products.

According to the Vietnam Fruit and Vegetable Association, coffee, cocoa, durian, and pepper prices will remain high because global demand is large and supply is decreasing.

Since the durian harvest begins in May prices are expected to decrease for a while before shooting back up in the closing months of the year, it added.

The Department of Agriculture and Rural Development in the Central Highlands province of Dak Lak said the upward trend in prices would continue due to an expected water shortage this summer.