1. Weekly News

Ethiopia

Ethiopia Aims for Record Coffee Export Growth with USD 2 Billion Revenue in 2024/25

Ethiopia is experiencing a significant surge in coffee exports, with plans to increase shipments by 100,000 tons this year. In the 2023/24 fiscal year, which ended on July 7, 2024, Ethiopia exported 298,000 tons of coffee, generating USD 1.43 billion. The country aims to raise exports to 400,000 tons in 2024, with expected revenues surpassing USD 2 billion. This growth is attributed to ongoing economic reforms, improved coffee quality, and better productivity. Additionally, Ethiopia has streamlined its supply chain, enabling direct communication and trade between suppliers and exporters for timely deliveries. Coffee production is vital to Ethiopia's economy, as approximately 20 million Ethiopians rely on the industry for their livelihoods.

Peru

Junín Advances Sustainable Coffee Sector with 72,500 High-Quality Seedlings

As part of Peru's Agrarian Revolution policy, the Chanchamayo Agricultural Agency produced 72,500 disease-resistant coffee seedlings for replanting in Santa Isabel, La Aurora, Marancocha, and Condorbamba. Ready for field transfer on Jan-25, these seedlings aim to enhance productivity and ensure sustainability in the coffee sector. Supported by strategic partnerships with cooperatives, private companies like Orygen Perú S.A.A., and state entities such as Senasa and INIA, this initiative underscores a collaborative effort to bolster the region's agricultural development.

Vietnam

Declining Coffee Production and Export Challenges in Vietnam

Vietnam's coffee production for the 2023/24 crop year is expected to fall by 6% year-on-year (YoY), with a further 5% YoY decline anticipated for 2024/25 due to adverse weather conditions disrupting harvests. Domestic consumption growth is putting additional pressure on reduced export supplies, with Nov-24 exports hitting their lowest since 2009. Low inventories and unfavorable weather have compounded challenges for exporters, though long-term price support remains driven by high transport costs, geopolitical tensions, and climate impacts.

Vietnam Coffee Exports Hit Record Revenue Despite Declining Volumes

Vietnam's coffee exports reached a record USD 5.2 billion in 2024, up 32.4% YoY despite a 16.5% drop in volume due to reduced production. Average export prices surged 58.5%, driven by tight global supply and rising demand, with December export prices nearly doubling YoY. Poor weather in key harvesting regions and declining yields have tightened supply, while financial investors on global exchanges and reduced Brazilian output have further fueled price hikes. Domestic prices mirrored the global surge, reaching unprecedented highs, as Vietnam's 2024/25 harvest faces continued delays and challenges.

Vietnam Implements Database System to Meet EU’s Deforestation-Free Regulation

Vietnam is advancing to meet the European Union's (EU) new deforestation-free regulation (EUDR) by implementing a pilot forest and coffee plantation database system. This system ensures that coffee exports are traceable and sourced from areas unrelated to deforestation, meeting the EU's strict import requirements. The Ministry of Agriculture and Rural Development (MARD) and IDH (Netherlands) led this initiative. Integrating provincial, district, and farm data will improve transparency and efficiency in the coffee supply chain, benefiting small farmers and export businesses. With the EUDR deadline extended to Dec-25, the system will play a crucial role in ensuring Vietnam's coffee industry remains competitive in the EU market while promoting sustainable practices. The initiative also aims to scale this model to other agricultural sectors in the future.

2. Weekly Pricing

Weekly Coffee Pricing Important Exporters (USD/kg)

Yearly Change in Coffee Pricing Important Exporters (W52 2023 to W52 2024)

Brazil

Brazil's coffee prices have seen a notable increase, rising to USD 7.70 per kilogram (kg) in W52 2024, reflecting an 8.45 week-on-week (WoW) increase, a 16.67% month-on-month (MoM) rise, and a 21.45% YoY surge. This price spike is primarily attributed to severe droughts in Minas Gerais, which have reduced rainfall and impacted production, compounded by similar weather disruptions in other coffee-producing countries, creating global supply constraints. The devaluation of the Brazilian real and rising shipping costs have intensified domestic price pressures. Looking ahead, coffee production forecasts for the 2025/26 crop year predict a 15% decline in Arabica output due to ongoing droughts, contributing to tight supply and sustained high prices, prompting increased sales from producers and shifts in hedging strategies by traders.

Colombia

Colombia's coffee prices have remained relatively stable at USD 7.30/kg, with slight fluctuations in W52, showing a minor WoW decrease of 0.54% and a MoM increase of 0.27%. Despite global supply challenges, this stability is notable. Prices have improved by 10.98% YoY, driven by a 20% increase in Colombia's coffee output in 2024, projected to reach 13.6 million 60-kg bags. This boost in production is attributed to favorable weather conditions and improved yields, contributing to a positive impact on prices despite the broader market volatility.

Vietnam

Vietnam's coffee prices experienced a slight WoW drop of 2.46% in W52 to USD 4.76/kg, stabilizing the market after the previous weeks' price increases. Despite this WoW decline, MoM prices remain higher, showing a 4.39% rise, primarily due to ongoing supply constraints. These constraints are driven by pest infestations, drought, El Niño's impact on key coffee-growing regions, and strong global demand. However, Vietnam's coffee production is expected to increase in the 2024/25 season to 30.1 million 60-kg bags, up from 27.5 million in 2023/24. This projected rise in production may lead to a price decrease in 2025.

3. Actionable Recommendations

Capitalize on Sustainability Trends

Peru's focus on sustainable coffee production, including the introduction of disease-resistant coffee seedlings, aligns with the growing global demand for sustainably sourced products. Exporters should explore opportunities to partner with Peruvian producers to capitalize on the rising interest in sustainable coffee. Additionally, Vietnam's efforts to comply with the EU's deforestation-free coffee regulations provide an opportunity to tap into the European market, where sustainability is a significant buying factor.

Focus on Product Differentiation

As global coffee consumption grows, especially in markets like the EU, the US, and China, businesses should consider product differentiation strategies to stand out in a competitive market. This could include offering specialty coffees, organic or fair-trade certified options, or blends from emerging producers like Ethiopia and Peru, where coffee quality and sustainability are becoming key selling points.

Leverage Ethiopia's Growth

Ethiopia's aim for record coffee export growth presents a unique opportunity for exporters to secure high-quality coffee at competitive prices. As Ethiopia expands its coffee export volumes and improves its supply chain, companies could explore strategic partnerships with Ethiopian producers to access this growing market and ensure a steady supply of high-quality coffee.

Sources: Tridge, Agro Peru, Kvedomosti, Nong Nghiep, Noticias Agrarias, Unian UA, Viet Stock, Vina Net