Vietnamese coffee, despite facing challenges in production and export, is expected to experience a year of dynamism and opportunity in 2024, driven by the flexibility and commitment of the domestic coffee industry. Let’s delve into the anticipated trends and their impacts on the price of Vietnamese coffee in the global market.
1. Export Volume Forecast:
Although currently in the harvest season, coffee prices have reached 73,400 VND/kg, a significant increase of 5,000 VND/kg (equivalent to 10%) compared to the end of December. This marks the first time in Vietnam’s over 30-year history of coffee exports that prices have risen so sharply – according to Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee – Cocoa Association (Vicofa). This reflects the uneven situation in cultivation and weather conditions in key areas such as Gia Lai, Dak Lak, and Dak Nong.
One notable point is the increase in productivity in Lam Dong, one of the leading coffee production areas, which has helped alleviate the pressure of reduced global production. However, the decrease in coffee cultivation area, especially in Dak Lak and Dak Nong, poses a challenge, while prolonged rains have caused late harvesting in some areas.
Although the domestic coffee industry is facing difficulties from natural factors and market fluctuations, the increase in domestic consumption is a positive sign. It is estimated that the total production capacity of soluble coffee processing will reach 100,000 tons/year, equivalent to 230,000 tons of coffee beans. This reflects the diversity and flexibility in the processing sector, which may further increase in the future due to investment projects to expand plant capacity.
One of the positive points lies in the increased domestic consumption, demonstrating positive responses from Vietnamese consumers to domestic coffee products. This not only helps stabilize the domestic market but also creates opportunities for domestic market enterprises to develop and expand.
2. Challenges from Export Markets:
In 2024, the Vietnamese coffee export market faces particular challenges after the Lunar New Year holiday, which may lead to a reduction in export volume. Although coffee prices have increased in the current season, export sectors are facing deployment of reduced exports after the holiday. These challenges pose a strategic picture for the Vietnamese coffee industry, requiring adjustments to minimize potential negative impacts and ensure strong export performance.
3. Positive Price Forecast:
The new coffee price has reached a significantly high level, up to around 70,000 VND/kg, creating a positive situation for the coffee market. It is expected that this price increase trend will continue until April 2024, as it is predicted that consumers will continue to hold onto their coffee, maintaining prices at around 60,000 VND/kg. This significant price increase marks a positive period for the Vietnamese coffee industry, which may bring economic benefits to those involved in the coffee supply chain.
4. Impact from the EU Market and Export Standards:
The Vietnamese coffee market is facing significant impact from the EU market, where export regulations are becoming increasingly stringent. Requirements for origin traceability and anti-deforestation (EUDR) for coffee products are increasingly stringent, posing a significant challenge for businesses in the industry. To meet these new standards and maintain coffee exports to the EU market, Vietnamese coffee businesses must focus on enhancing their adaptability, even proposing specific and stringent measures in the production and export process. This will require long-term investment and commitment from businesses to maintain and expand coffee exports to the EU region.
5. Investment and Sustainable Development:
2024 is expected to be a challenging and opportunistic period for the Vietnamese coffee export market, and innovation and sustainable commitment will be the key to seizing opportunities and overcoming challenges.
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