Vietnamese Coffee Export Prices and Revenue Rise in the First Quarter, Opening Doors for Indian Coffee Exports

Published 2022년 8월 31일

The largest robusta exporting country in the world, Vietnam, recorded a YoY increase of 17.3% and 43.6%, respectively, in the export volume and value during the first 7 months of 2022. The higher value was driven by the rising average export price of Vietnam's coffee, a price that is 22.5% higher than last year. Lower production estimates inflated the domestic coffee prices, which further pushed up the export prices. It is anticipated that, with the higher cost of importing Vietnamese coffee, India will tap some of Vietnam’s previous export markets. The lower production estimates of coffee in Vietnam have pushed many traders to place orders in India, while some are waiting until Vietnamese coffee goes into harvest by November before placing orders.

During the first 7 months of 2022, Vietnam's coffee export volume reached 1.13 million mt and the revenue from these exports was about USD 2.56 billion. The export volume and value were up by 17.3% and 43.6%, respectively, over the same period last year. According to the latest available data, in July 2022, the average export price of Vietnam's coffee increased for the second consecutive month, reaching USD 2,299 per ton. This price demonstrates an increase of 0.2% compared to June 2022 and of 19.6% compared to July 2021. The average export price of Vietnam's coffee reached USD 2,261 per ton, up 22.5% over the same period in 2021. During this period, Vietnam’s coffee exports to most markets increased, with Belgium and the UK growing by three figures, while exports to Spain, Russia, and the UK grew by double digits.

The rising coffee export prices from Vietnam are driven by the rising costs of producing coffee and subsequent rise in wholesale prices of coffee. Skyrocketing prices of inorganic fertilisers in the country have led to the increased use of organic fertilisers in Vietnamese coffee plantations, triggering concerns of a lower yield in the marketing year 2022–23 (October to September). Furthermore, according to the Vietnam Coffee and Cocoa Association, coffee prices were inflated due to predictions that 2022’s coffee production would be low. Although the harvested coffee pods are reported to be decent in shape, the kernel, in many cases, has been reported to be absent in the pod. Due to these lower production estimates, the per kg coffee price has increased from USD 1.76 to USD 2.09, which is a YoY increase of 18%.

Domestic Coffee Prices in Vietnam August 2021 - August 2022

Source: Tridge.

As we move towards H2 of 2022, there is hardly any coffee that remains due for harvest and the traders must wait until November 2022 for any information about the new crop. As the main coffee variety grown in Vietnam and India both happen to be the Robusta variety, the latter may be able to tap into Vietnam’s global coffee market. India’s coffee outlook has been looking brighter in comparison to that of Vietnam's as the Coffee Board of India projects a bumper crop, with a YoY increase of 15 percent compared to last year. Predictions of a smaller coffee crop in Vietnam has pushed many traders to place orders in India, while some continue to wait for Vietnam to go into harvest by November.