Key points in Vietnamese coffee market in particular (free to download)
- In its initial estimate of the 2021-2022 global coffee outlook, the ICO forecast production at 167.2 million bags, down 2.1% from 170.8 million bags in the 2020-2021 crop. One of the main factors contributing to this decline is the expected decrease in arabica production by 7.1% to nearly 94 million bags; while robusta production is forecast to increase by 5.1% to 73.2 million bags.
- World coffee consumption is expected to increase by 3.3% by ICO, reaching 170.3 million bags of 60 kg in the crop year 2021-2022. Thus, production will be short of about 3.1 million bags compared to consumer demand. consumption in the 2021-2022 crop year. The balance has shifted mainly due to a significant adjustment in Venezuela’s consumption.
- The world coffee market fluctuated sharply after the military conflict between Russia and Ukraine took place on February 24. The price of coffee futures on the New York and London exchanges accordingly fell 3.1%, the biggest daily drop since the 6.9% drop recorded on July 30, 2021.
- Currently, coffee growers in the Central Highlands in Vietnam are busy watering coffee to provide enough water for flowering plants in the new crop year, in the context of high oil and fertilizer prices. This affects their profits in the next crop year. According to Reuters, some people expressed concern when the escalating Russia-Ukraine tensions made the supply of fertilizer more tight, leading to an increase in the price of this commodity.
- According to the Import-Export Department, Vietnam’s coffee exports in February reached 130 thousand tons, worth US$304 million, down 20.4% in volume and 18% in value compared to January. February 2021 increased by 5.7% in volume and 40% in value.
- In February, Robusta coffee prices kept high. Compared to the end of January, the domestic coffee price still increased sharply.
- In the context of escalating Russia-Ukraine tensions accompanied by uncertainties about world trade, we believe that domestic coffee prices will be affected in the short term.
- Many coffee exporters said that the Russia-Ukraine conflict and Russia’s exclusion from the SWIFT system have made exports difficult, many shipments have been delivered but have not yet been recovered.
Overview of Vietnamese coffee market dated February 2022 (newly updated)