Vietnam Still Has Plenty Of Room For Coffee Exports To The US, Germany And France

World coffee prices rose in February 2022, according to Vietnam's Ministry of Agriculture and Rural Development. Specifically, the price of Robusta coffee for delivery in March 2022 increased by US$174 per tonne to US$2,349 per tonne in the London market. The continued decline in world coffee stocks has led to higher coffee prices.

The domestic coffee market rose in line with the trend in the world coffee market. Raw coffee prices in the Western Plains provinces are currently between VND40,800 and VND41,400/kg, an increase of VND1,600/kg. The FOB price of Robusta coffee delivered at the port of Ho Chi Minh rose by US$59 per tonne to US$2,289 per tonne.

Coffee exports reached 293,000 tonnes in the first two months of 2022 and reached US$674 million, up 3.4% and 35.6% respectively compared to the same period in 2021.

The USDA forecasts that Vietnam's coffee production in the 2021-2022 coffee year will increase by 2.1 million bags to 31.1 million bags compared to the previous crop year, following a severe drought in the previous crop year.

An assessment of the coffee market in 2022 suggests that Vietnam has a strong prospect of increasing its coffee exports to the world's top 5 markets, including the US, Germany, France, Canada and Italy.

The recovery of the world's major economies is also helping to boost coffee consumption. The growing trend in instant coffee consumption is helping to increase the dominance of Robusta coffee in Vietnam. Robusta is the raw material used to process instant coffee, and Vietnam is the world's largest exporter of Robusta coffee.

The USDA also forecasts that world coffee production in the 2021-2022 crop year will decrease by 8.5 million bags, equivalent to 4.8%, from the previous crop year to 167.5 million bags (60 kg type).

Global coffee consumption is expected to increase by 1.5 million bags to 165 million bags in 2021-2022, with growth mainly coming from the European Union, the United States and Brazil. Global coffee stocks are also expected to decrease by 6.3 million bags to 30 million bags, the lowest level in the last five years.