Vietnam’s coffee production has declined, and local farmers are switching to higher-profit crops such as durian

Due to local farmers switching to higher-profit crops such as durian, the coffee production in Vietnam is decreasing while domestic demand continues to grow. This means that the country’s coffee exports to the world may decrease.

Vietnam is the second largest coffee exporter globally and the largest producer of Robusta coffee. Last year, Vietnam’s coffee export value exceeded $4 billion, reaching its highest level in over a decade.

Do Ha Nam, Vice Chairman of the Vietnam Cocoa Coffee Association, stated at a meeting that Vietnam’s current coffee production is estimated to be between 1.6 million and 1.7 million tons, lower than last year’s figure of 1.78 million tons, with almost depleted stocks from the previous year.

For coffee consumers, this unfavorable outlook for Vietnamese supply is bad news as they are already facing rising daily prices for their favorite beverage. Earlier this year, due to supply shortages, London Robusta coffee futures prices soared to their highest level since 2008 and increased by more than 10% just last month alone – marking the biggest increase since January this year.

Nam pointed out that the area dedicated to growing Vietnamese coffee is shrinking, especially in Dak Nong Province and Dak Lak Province where some regions are experiencing declining yields.

He mentioned that due to some farmers cutting down their coffee trees and switching to more profitable crops like durian and avocadoes, Vietnam’s total area under cultivation for coffee might be around 600 thousand hectares instead of the latest estimate by the Ministry of Agriculture which was at 700 thousand hectares.

Nguyen Nam Hai, Chairman of the Vietnam Cocoa Coffee Association also stated during the same meeting that Vietnam’s coffee exports for fiscal year 2023-24 may decline by 15% compared with last year’s figure of 1.66 million tons; as of November-end harvest had been completed by about half with local prices having risen over40% compared with last year’s figures.

Nam expects that once instant coffee factories reach full production capacity, the local consumption of coffee beans may increase from the current annual figure of 260 thousand tons to 350-400 thousand tons, but he did not provide a specific timeline.

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