Vietnam’s coffee industry loses global market share
The global market share of Vietnamese coffee has shrunk from 22% in 2014 to 18% this year even though the country is still the world’s second biggest coffee exporter.
At a forum on the industry’s prospect and development in Ho Chi Minh City on December 2, the Vietnam Coffee Coordination Board (VCCB) reported that 1.13 million tonnes of coffee was exported for US$2.3 billion from January to November of 2015, down 28% in volume and 30% in value.
The domestic average selling price dropped from VND41,000 (US$1.8) in 2014 to VND36,000 (US$1.6) per kg at the outset of the ongoing harvest season this year. Coffee prices have continuously fallen since the beginning of this year, the VCCB noted.
Nguyen Nam Hai, General Director of the Vietnam National Coffee Corporation, elaborated that coffee is currently priced at VND32,800 (US$1.46) – VND33,000 (US$1.47) per kg in the domestic market, while the production cost is already VND33,000 per kg.
The price fall is due to rumours in foreign markets that Vietnam has excessive unsold inventory while this year’s crop is good, said Vice Chairman of the Vietnam Coffee – Cocoa Association Do Ha Nam, adding that the association has reputed the information to little avail.
Other industry insiders blamed the continuous price decline on falling global demand. Additionally, major coffee exporters like Brazil and Colombia devalued their currencies, fuelling their shipments.
Some experts forecast Vietnam’s coffee industry will continue to face difficulties in the next crop, adding that the coffee output will further drop as a result of climate change, especially the El Nino phenomenon which is getting worse in the Central Highlands – the country’s coffee growing hub. Price hikes are also not expected in the next crop.
The domestic average selling price dropped from VND41,000 (US$1.8) in 2014 to VND36,000 (US$1.6) per kg at the outset of the ongoing harvest season this year. Coffee prices have continuously fallen since the beginning of this year, the VCCB noted.
Nguyen Nam Hai, General Director of the Vietnam National Coffee Corporation, elaborated that coffee is currently priced at VND32,800 (US$1.46) – VND33,000 (US$1.47) per kg in the domestic market, while the production cost is already VND33,000 per kg.
The price fall is due to rumours in foreign markets that Vietnam has excessive unsold inventory while this year’s crop is good, said Vice Chairman of the Vietnam Coffee – Cocoa Association Do Ha Nam, adding that the association has reputed the information to little avail.
Other industry insiders blamed the continuous price decline on falling global demand. Additionally, major coffee exporters like Brazil and Colombia devalued their currencies, fuelling their shipments.
Some experts forecast Vietnam’s coffee industry will continue to face difficulties in the next crop, adding that the coffee output will further drop as a result of climate change, especially the El Nino phenomenon which is getting worse in the Central Highlands – the country’s coffee growing hub. Price hikes are also not expected in the next crop.