Currently, farmers have finished harvesting the coffee crop 2019/2020, and due to the recent long Tet holiday along with the anxiety about Coronavirus disease in China, the worse situation has affected the price of coffee in the market.
In the domestic market, at the beginning of the crop, the price of coffee is over 42,000 VND/kg, at the end of the season, the price fluctuates continuously and fluctuates around 31,400 VND/kg. The fluctuations in prices always tend to be detrimental to coffee growers while input costs are always increasing, resulting in insufficient income, so many farmers have cut down coffee gardens to switch to other more valuable crops.
The reason, due to the domestic price of Robusta coffee, was affected by London exchanges. Specifically, on 3/2/2020, domestic coffee prices still ranged from 31,100 - 31,400 VND/kg, in Ho Chi Minh City, cost 1,414 USD/ton (minus 80USD/ton), and compared to 2/2, it is still stable. Earlier, on 1/2/2020, coffee prices in the Central Highlands provinces reversed a slight increase of VND 500/kg compared to January 31, fluctuating in the range of VND 30,900 - 31,400/kg.
Although the price of coffee has nearly reached the bottom within the past 10 years and the 2019-2020 crop, it is the third consecutive year that the coffee industry has had a price crisis, causing difficulties for farmers. But the consumption of coffee in the first quarter of 2020 is forecast to increase while the selling volume is moderate, along with many uncertainties about the exchange rate, the world trade may cause the price of coffee to be different from the forecast.
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According to the preliminary report of the General Department of Vietnam Customs, in January 2020, the amount of exported coffee was estimated at 162,572 tons of all kinds, worth $ 284,732 million, down 13.61% in volume and down 13.08% in terms of value compared to December 2019, but compared to the same period in 2019 it only decreased by 11.49% in volume and 12.21% in value.
The amount of exported coffee in January 2020 decreased sharply due to the fall in the Lunar New Year holiday, which directly affects the volume and turnover of January 2020.
According to Do Ha Nam, Vice Chairman of the Vietnam Coffee and Cocoa Association (Vicofa), Chairman of the Board of Directors, General Director of Intimex Group, the price of coffee on the floor decreased due to abundant supplies, and the transactions took place quietly dragging the domestic coffee prices down to an extremely low level, resulting in people refusing to sell. Moreover, the psychology of the Tet holiday is another reason why they did not hurry to sell.
Robusta coffee prices traded on the London floor approximately 1,300 USD. This is the lowest price in 10 years. The bottom price of 10 years ago was $ 1,267, but with farmers when the price of green coffee traded below 32,000 VND/kg, people did not sell.
"Coffee prices on the London floor fell nearly the same price as 10 years ago, dragging domestic coffee prices down too low, so people do not want to sell. If you want to buy coffee, buyers must increase the price from 100 to 110 VND/kg, then the price of exported coffee will reach about 1,400 USD/ton, "Mr. Nam said.
In 2019, Vietnam's coffee export reached 1,653 million tons, worth US $ 2,854 billion, down 11.9% in volume and 19.3% in value compared to 2018. The average export price reached 1,727 USD/ton, down 8.3% compared to 2018. According to Vicofa, the export price of coffee in this crop was at a record low level within the past 10 years, sometimes down to 1,207 USD/ton for Robusta coffee.
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