Vietnam's coffee exports fall in volume and price

According to the Ministry of Agriculture and Rural Development: in the first half of 2019, Vietnam exported a total of 943,000 tonnes of coffee with an export value of $1.6 billion, down 9.2 per cent and 19.9 per cent year-on-year, respectively. Vietnam's main export markets for coffee are Germany and the United States, accounting for 13.2 per cent and 9.8 per cent of Vietnam's coffee export market share respectively, with Germany and the United States importing less coffee from Vietnam in the first half of the year.

The decline in Vietnam's coffee exports was mainly affected by changes in global coffee supply and demand. In the first half of this year, due to high global coffee supply, the price of Robusta coffee futures in the UK London market in July fell by $476/tonne, and Vietnam's domestic coffee prices also fell accordingly, with coffee export prices falling by an average of 11.5% in the first half of the year. Compared to prices in other major coffee exporting countries in the world, Vietnam's coffee export prices are at the lowest level. Among the 10 largest coffee suppliers to the US in 2018, Vietnamese coffee was only at the bottom of the list with an average price of US$1,881/tonne.

Vietnam's coffee export prices have long been lower than those of Brazil, Colombia and other coffee-producing countries, due to the fact that primary coffee accounts for about 80 percent of total exports from Vietnam, and the coffee harvested is often substandard in terms of maturity and also mixed with impurities, resulting in low product quality. In addition, although Vietnam is the world's largest exporters of Robusta coffee, but does not have the corresponding pricing power, the price is entirely located in New York or London, the coffee trading hall control, the harvest season there is the phenomenon of price suppression. Industry analysts believe that if Vietnam fails to change the quality of coffee and the way it is traded, exports will continue to face greater pressure.