Vietnam's Coffee Exports Fall 17.6% Year-on-Year in January Due to Container Shortage
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Vietnam's Coffee Export Decline in January
Vietnam is the world's largest producer of Robusta beans. According to the General Statistics Office (GSO) on January 29, Vietnam's coffee exports in January decreased by 17.6% year-on-year to 120,000 tons, equivalent to 2 million bags (60 kilograms per bag). It is estimated that Vietnam's Robusta coffee export revenue for this month decreased by 12.6% compared to the same period, to $217 million.
Domestic Coffee Prices Remain Stable
Vietnamese coffee traders stated on January 28 that domestic coffee prices showed little change this week compared to the previous week. Coffee grown in Vietnam's Central Highlands was sold at prices of 31,500 to 31,700 Vietnamese dong ($1.37) per kilogram, lower than the previous week's price range of 31,200 to 32,000 Vietnamese dong. The reason is that Vietnam's coffee harvest for the 2020-21 season, which began in October, has now concluded.
Farmer Sales Constraints and Export Challenges
Previously, Vietnamese local coffee farmers had sold about 40% of their Robusta coffee beans, but sales are now limited due to unattractive prices. Farmers complain that prices are too low to release their stock in large quantities. They are only selling enough to meet their daily needs. Meanwhile, traders stated: "When farmers face pressure to cash in before the Lunar New Year holiday, they will sell more different grades of Robusta coffee beans, even if prices don't meet their expectations."
Although coffee traders can purchase more coffee beans, one trader noted: "The shortage of containers makes it very difficult for us to transport coffee beans for export." Over the past two months, shipping costs for most shipping companies have increased 2-10 times, depending on the shipping industry.
Soaring Container Costs
For example, shipping a 20-foot container to the UK typically cost $1,420, but rose to $5,420 in November and $7,200 in December. Before October, container rental from Los Angeles, USA to Vietnam cost $700-1,000, but this figure rose to $5,000 in November. If COVID-19 remains uncontrolled, ship and container shortages will continue until March or even longer.
2020 Coffee Export Performance
According to official data, Vietnam exported a total of 26,666,667 bags of coffee in 2020, a 5.6% decrease from 2019. Export revenue reached $2.74 billion, also a year-on-year decrease of 4.2%.
Production Forecast for 2020-21
With the harvest season ending, Vietnamese coffee traders expect Vietnam's coffee production for the 2020-21 season to decrease by 16%-17%, reaching approximately 25 million bags of 60 kilograms each. The production decline is due to pre-harvest drought and persistently low coffee prices, which have discouraged farmers from investing in fertilization and irrigation for their farms.
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