Vietnam's coffee exports have reached an impressive $2.9 billion in the first five months of this year, marking a 43.9% increase over the same period last year, driven by rising prices despite a slight decline in volume. This growth highlights the resilience of the coffee industry amidst challenging climatic conditions.
According to statistics from the Ministry of Agriculture and Rural Development, the export volume dropped by 3.9% to 833,000 tonnes. However, the average export price in May surged to $4,208 per tonne, up 11.7% from April and a remarkable 63.6% higher than in May 2023. From January through May, prices averaged $3,428 per tonne, a 49.9% increase over the same period last year.
Despite the impressive growth in export value, Vietnam's coffee industry faces challenges due to prolonged heat and drought affecting output. Since the start of the crop season in October 2023, over 1.2 million tonnes of coffee have been exported, resulting in low inventory levels while prices remain high.
The Vietnam Coffee Association (Vicofa) anticipates a 20% reduction in coffee exports for the 2023-24 crop season, predicting exports to fall to 1.336 million tonnes. Meanwhile, the Foreign Agriculture Service (FAS) of the US Department of Agriculture forecasts a slight decrease in Vietnam's robusta coffee output, from 28 million bags to 27.9 million bags, or 1.68 million tonnes.
According to the Mercantile Exchange of Vietnam, concerns over declining output from major coffee exporters, including Brazil and Vietnam, are expected to continue driving up coffee prices. Vicofa projects that coffee prices will remain high in June.
The Ministry of Agriculture urges farmers to avoid expanding coffee plantations without proper planning. Furthermore, with the European Deforestation Regulation set to take effect by the end of this year, coffee not proven to be free from deforestation links after December 31 will be barred from entering the EU.
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