Robusta Coffee Prices Surge: Unraveling the Factors Behind the Sudden Spike
In the past, Robusta coffee prices were often just a third to half of Arabica coffee prices. Explaining this phenomenon, Mr. Nguyen Nam Hai, Chairman of the Vietnam Coffee-Cocoa Association (VICOFA), said that the main reason was the sharp reduction in the supply of Robusta coffee due to the impact of climate change.
“The surge in Robusta coffee prices is mainly due to the dynamics of supply and demand. Climate change has affected all types of coffee, but Robusta coffee beans, with their large production in Asian countries such as Vietnam, Malaysia, and Indonesia, have been the most impacted. The significant decrease in the production of this type of coffee has led to a rapid increase in its price,” analyzed Mr. Hai.
Robusta coffee export prices surpass Arabica for the first time. (Illustration: Ethnic Minority and Development Newspaper)
Mr. Hai also attributed the price hike to the increasing global demand for Robusta coffee beans, a phenomenon unseen before in the Vietnamese coffee market.
“The global demand for Robusta coffee has been on the rise, driven by the increasing consumption of instant coffee in developed countries like South Korea and Japan. Instant coffee relies mainly on Robusta beans as they offer a bolder flavor,” Mr. Hai explained.
The Chairman of VICOFA also asserted that the high Robusta coffee prices benefit Vietnam’s coffee consumption significantly. This is because 94% of Vietnam’s coffee-growing area is dedicated to this variety. In reality, although the volume of exports from Vietnam decreased during the first eight months of this year, the export value increased substantially compared to the same period in previous years. Specifically, according to the General Statistics Office, Vietnam’s coffee exports reached 1.052 million tons, with a turnover of 3.99 billion USD in the first eight months, a decrease of 12.5% in volume but a remarkable increase of 34.8% in value compared to the same period last year.
In the first half of September, Vietnam’s main export remained Robusta coffee, with 15,155 tons exported at an average price of 5,053 USD/ton, earning 76.583 million USD. Arabica coffee exports, on the other hand, stood at 1,129 tons, with an average price of 4,166 USD/ton, bringing in 4.705 million USD. Thus, the export price of Vietnamese Robusta coffee exceeded that of Arabica by 887 USD/ton.
The export price of Robusta coffee was first recorded to be higher than that of Arabica in May, with a difference of 32 USD/ton (Robusta coffee beans at 3,920 USD/ton and Arabica at 3,888 USD/ton). Since then, the gap has widened as the price increase of Robusta coffee has been more pronounced.
Economic experts explain that previously, Robusta coffee prices were only maintained at about a third of Arabica coffee prices. However, as Robusta coffee prices became more affordable and their quality improved, roasters worldwide increased their usage ratio, leading to a surge in demand. Meanwhile, Robusta coffee production decreased due to weather influences and farmers switching crops after prolonged low coffee prices, resulting in reduced coffee-growing areas.
Currently, in Vietnam, the coffee is about to enter a new harvest season. Mr. Nguyen Nam Hai advised farmers to prepare well for processing, drying, and roasting to ensure the best preservation of coffee beans in case of unfavorable weather. “Usually, Vietnam will harvest coffee between November and December. If the weather is sunny during this period, the harvest will be very favorable for farmers. However, if it rains, with such a large harvest volume, our drying and roasting facilities may not be sufficient, which can be dangerous. The coffee bean quality will deteriorate, and export volume may decrease significantly,” emphasized Mr. Hai.
In the global market, during last week’s trading session, the price of Robusta coffee on the London floor for November delivery fell to 5,059 USD/ton, a decrease of 427 USD/ton compared to the peak set on September 16 (5,486 USD/ton). This was mainly due to investors taking profits after the rapid increase in agricultural product prices over a short period.
“Vietnam and the EU to Discuss Pathways to a Green Future at GEFE 2024”
At GEFE 2024, pivotal discussions will revolve around pivotal topics that propel us towards a sustainable future: climate resilience, digital transformation for green finance, and sustainable energy transition. These are the key drivers for Vietnam to achieve its Net Zero target by 2050.
The Ferocity of Storms in Southeast Asia: A Vietnamese City in the Eye of the Storm
Recent research has revealed that tropical cyclones in Southeast Asia are now forming closer to the coast, intensifying more rapidly, and lingering over land for extended periods.
“The Key to Longevity: Staying on Track with Sustainable Development”
Quality from the get-go is a matter of survival and longevity for any business; it’s a “make or break” deal and demands a daily commitment.
The First Country to ‘Shut the Door’ on Gasoline Cars: A Misstep?
Six months after the ban, this is the reality in the world’s first country to prohibit the import of petrol and diesel cars.
