According to the US Department of Agriculture (USDA), ending inventories of global coffee will reduce by 2.76 million bags in 2017-18 to about 29.27 million bags, the lowest level since 2011-12. The figures for Vietnam were 70,000 and 1.11 million bags.
The USDA was positive about Vietnam’s coffee production, saying the country would produce a record crop in 2017-18 at 29.9 million bags, up from the body’s prior estimate at 28.6 million bags and from 26.7 million bags in 2016-17. Vietnam forecasted its own yield at between 26 and 26.5 million bags.
Do Ha Nam, deputy head of the Vietnam Coffee & Cocoa Association, said coffee market demand and prices are stable.
Nam added that domestic producers are keeping their goods in stock in hope of higher prices, while foreign companies are yet to intensify transactions due to slow business.
In the first month of 2018, Vietnam was estimated to sell 173,438 tonnes of coffee overseas for US$338 million. In January, the local market recorded robusta prices growing 0.8% from the previous month to hit US$1,644 per tonne.
The marginal increase was attributed to the significant amount of 2017’s ending stocks, which was a result of reduced export volume. Last year, coffee export quantity stayed at 1.4 million tonnes, an annual decrease of 19%.
The year saw the average price for coffee exports reaching US$2,249 per tonne, up 20.1% year on year. As such, despite lower quantity, export value was at US$3.2 billion, down just 2.7% annually.
Vietnam’s coffee exports to major markets experienced huge reductions in 2017 compared to 2016. In recent months, as harvesting season began, the exports have been bounced back in the EU, Russia, Algeria and the Philippines.
According to the International Coffee Organisation, global supply would be better in the last half of 2018 and coffee prices were less likely to drop in the short term as the world’s two biggest growers Brazil and Vietnam both saw consecutive export volume decreases in past months.