What’s Behind the Surge in Coffee Prices?

On November 26, the price of bulk coffee beans in Vietnam’s Central Highlands, the country’s main coffee-producing region, surged past 120,000 VND per kg, a significant increase from the previous year’s price of just over 50,000 VND per kg.

In a brief exchange with the Laborer Newspaper reporter this morning, Mr. Trinh Duc Minh, Chairman of the Buon Ma Thuot Coffee Association, attributed the recent surge in coffee prices to multiple factors, some of which are not quickly resolvable. In Brazil, the world’s leading coffee exporter, prolonged drought and delayed rainfall have raised serious concerns about future supply.

Vietnam’s coffee industry faces similar challenges. The fear of crop failure has become a reality, and unfavorable weather conditions, including frequent rainfall and low temperatures, have delayed the coffee harvesting and drying process. The harvest yield is expected to increase significantly in December. Additionally, another crucial factor is that farmers are in no rush to sell their coffee beans, reducing the supply in the market and further driving up prices.

These factors, combined with global dynamics, are sustaining upward pressure on coffee prices in the current phase.

Mr. Minh added that, in addition to unfavorable weather conditions, intercropping of other crops in coffee plantations has also significantly reduced coffee yields this year.

Last night, the price of Robusta coffee on the London trading floor continued to surge, grabbing the attention of the business community. During the trading session on November 25 (closing session in the early morning of November 26 Vietnam time), the price of Robusta coffee for January 2025 delivery reached a high of 5,327 USD/ton, an increase of 342 USD/ton (equivalent to 8.6 million VND/ton). The final matched order price was 5,110 USD/ton, up 125 USD/ton (approximately 3.1 million VND/ton).

Other futures also recorded significant increases: March 2025 rose to 5,036 USD/ton (up 113 USD/ton), May 2025 reached 4,963 USD/ton (up 104 USD/ton), and July 2025 climbed to 4,875 USD/ton (up 86 USD/ton).

Similarly, the price of Arabica coffee on the New York floor also increased, with the March 2025 futures price reaching 6,720 USD/ton, a rise of 60 USD/ton.

This sudden price hike has prompted questions from traders and investors in the international market about the influencing factors, especially considering the supply-demand dynamics and weather fluctuations in the major coffee-producing countries.

Ms. Nguyen Thi Chien, a coffee farmer in Dak Ha, Kon Tum, who owns 4 hectares of coffee plants, said that she has never experienced such a significant price increase at the start of the harvest season. In October, she sold picked coffee beans at 115,000 VND per kg, and now traders are offering over 120,000 VND per kg, a substantial improvement from the previous year’s price of just over 50,000 VND per kg.

According to Ms. Chien, some neighboring households without drying yards or storage facilities usually sell fresh coffee beans at 26,000 VND per kg, four times the price four years ago.

“My family has harvested more than 50% of our coffee plants, and we are drying and storing the beans, waiting until after the Tet holiday to assess the market situation before deciding when to sell,” Ms. Chien shared her plan.