Market volatility: Coffee seedlings in a greenhouse in Vietnam. The country’s price hike is largely driven by tightening Arabica supply from Brazil – the world’s largest producer – as the country’s harvest season concludes. — Bloomberg
HANOI: Coffee prices are soaring at an unprecedented pace, surpassing expert predictions and raising concerns over market speculation.
On Feb 11, coffee prices in the Central Highlands climbed to 131,000 dong per kg, an increase of 2,000 dong from the previous day.
On the London exchange, Robusta coffee prices fluctuated between US$5,573 and US$5,696 per tonne (approximately 140,000 dong to 144,000 dong per kg), while Arabica coffee on the New York exchange surged by US$540, reaching US$9,460 per tonne for the March 2025 contract.
According to nld.com.vn, Phuc Sinh JSC chairman Phan Minh Thong described the current price surge as “insane” and warned that the upward momentum could continue.
He noted that businesses were being forced to buy and sell at elevated prices rather than securing pre-determined contracts.
The price hike is largely driven by tightening Arabica supply from Brazil – the world’s largest producer – as the country’s harvest season concludes.
Meanwhile, farmers are holding back stock, anticipating further price increases.
This supply squeeze has sustained Robusta prices at high levels, with the price gap between the two coffee types widening to US$3,780 per tonne.
Despite record-high prices, Vietnamese coffee farmers remain cautious about selling.
Nguyen Thi Chien, a coffee grower in Kon Tum, said that her family sold only one tonne at 115,000 dong per kg, keeping the rest in storage in hopes of further gains.
However, market volatility has left many farmers uncertain about the optimal time to sell. From October 2024 to January 2025, Vietnam’s coffee exports declined sharply in volume but increased in value.
In January alone, the country exported 137,568 tonnes of coffee, generating US$694.93mil.
This was a 38.2% drop in volume but an 8.8% rise in value year-on-year.
Director of Global Trade Link Co Ltd Nguyen Ngoc Luan remains optimistic about the price outlook.
He cited concerns over crop failures and potential US tariffs on South American goods, which could strengthen Vietnam’s competitive position in the global market.
However, Nguyen Huu Long of Vietnam Coffee Academy JSC raised concerns that domestic coffee prices remain 15,000 dong per kg lower than those on the London exchange.
This suggested potential price manipulation.
The soaring prices have also raised alarms over counterfeit coffee production.
In late January, authorities in Gia Lai uncovered three facilities in Pleiku mixing unidentified chemicals into ground coffee.
Similarly, Brazil’s Coffee Roasters Association issued a warning about adulterated coffee made from husks, leaves and other non-coffee substitutes.
Despite record-high prices, Vietnam’s coffee industry is unlikely to face an oversupply crisis.
This is because land for coffee cultivation remains limited.
Experts predict that strong prices will persist until July 2025, but warn farmers against excessive speculation to avoid financial risks. — Viet Nam News/ANN
