Vietnamese coffee prices rise amid declining output and EU regulations

Vietnamese coffee prices rise amid declining output and EU regulations

Specifically, the price was VNĐ130,500 per kilo in Đắk Lắk Province, VNĐ130,000 in Lâm Đồng Province, VNĐ130,400 in Gia Lai Province, and  VNĐ130,500 in Đắk Nông Province, vnbussiness.vn reported.

A coffee farm in a Central Highland province. Coffee prices are rising in the Central Highland provinces. —VNA/VNS Photo

Coffee prices in Việt Nam’s Central Highlands have seen a notable surge as of April 25, with a significant increase of approximately VNĐ1,100 per kilogramme against the previous day to VNĐ130,000-130,500 (just shy of US$5) per kilo.

Specifically, the price was VNĐ130,500 per kilo in Đắk Lắk Province, VNĐ130,000 in Lâm Đồng Province, VNĐ130,400 in Gia Lai Province, and VNĐ130,500 in Đắk Nông Province, vnbussiness.vn reported.

This price increase comes at a time when the Vietnamese coffee industry is grappling with several pressures from both domestic and international markets.

One of the key challenges facing the industry is the introduction of the European Union's new Anti-Deforestation Regulations (EUDR), which have significant implications for coffee exports, particularly for countries like Việt Nam.

Việt Nam, which relies heavily on small-scale farmers for coffee production, is finding it increasingly difficult to meet the stringent requirements set by the EUDR.

These regulations, along with concerns over climate change and traceability requirements, place immense pressure on the country's coffee industry to comply with higher environmental and production standards.

The deputy director of the Department of Crop Production and Plant Protection, Nguyễn Quốc Mạnh, highlighted that the lack of a unified forest map across provinces in Việt Nam complicates the identification of eligible growing areas for export.

Such a fragmented mapping system, coupled with the high costs of certifying each small growing area, adds to the financial burden faced by producers.

Another critical issue is the lack of land use rights certificates for 15-20 per cent of coffee-growing areas in Việt Nam.

This gap in certification further complicates the ability of Vietnamese coffee producers to meet European standards, making it more challenging to prove the legality of coffee exports.

For Việt Nam to maintain its competitive position in the global coffee market, addressing these regulatory hurdles is imperative.

In addition, businesses within the coffee industry are facing price fluctuations that make it difficult to predict market trends.

Many companies report that coffee prices vary significantly from year to year, which complicates negotiations between buyers and sellers. As a result, trading activities are largely limited to small, urgent orders that primarily serve domestic roasters.

Việt Nam's coffee output has been further affected by adverse weather conditions in recent years, leading to a decline in productivity. Many coffee-growing areas have also been converted to other crops or urbanised, further reducing the available supply.

Typically, coffee can be stored in warehouses for between two to three years, without losing its quality. However, the decline in output due to these factors is contributing to the current price rise.

On the global market, prices for Robusta coffee have been on upward trend on the London exchange, with values rising between $58 and $78 per tonne to between $5,150 and $5,411.

Việt Nam primarily grows Robusta coffee beans, accounting for over 90 per cent of its coffee production.

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