What is the cause of high coffee prices?

Coffee prices are high in the middle of the harvest, but many farmers are holding off on selling in hopes that prices will continue to rise.

On the morning of November 26, the price of green coffee beans in the Central Highlands raw material region exceeded 120,000 VND/kg, while in the same period last year it was only over 50,000 VND/kg.

Quick chat with reporters Lao Dong Newspaper This morning, Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association, explained that the recent high coffee prices stem from many causes, including problems that cannot be resolved quickly. In Brazil, the world's leading coffee exporting country, prolonged drought and delayed rains have created great concerns about future supply.

In Vietnam, the coffee industry is facing similar challenges. Fears of crop failure have become a reality, while heavy rains and low temperatures have delayed the harvesting and drying of coffee beans. Production is expected to pick up significantly in December. Another important factor is that farmers are reluctant to sell their coffee, reducing supply to the market and pushing prices up further.

These factors, combined with global developments, are maintaining upward pressure on coffee prices in the current period.

Vietnam's poor coffee crop pushes prices higher

Mr. Minh added that this year's decline in Vietnam's coffee output is not only due to weather factors, but also due to intercropping with other crops in coffee gardens, which has caused garden productivity to drop sharply.

Last night, Robusta coffee prices on the London exchange continued to increase sharply, attracting attention in the business community. In the trading session on November 25 (closing the session early morning November 26, Vietnam time), Robusta futures for delivery in January 2025 reached a peak of 5,327 USD/ton, an increase of 342 USD/ton (equivalent to 8.6 million VND/ton). The final matched price was 5,110 USD/ton, an increase of 125 USD/ton (about 3.1 million VND/ton).

Other terms also recorded significant increases, such as: March 2025 term increased to 5,036 USD/ton (up 113 USD/ton), May 2025 term reached 4,963 USD/ton (up 104 USD/ton), and July 2025 term increased to 4,875 USD/ton (up 86 USD/ton).

Similarly, Arabica coffee prices on the New York floor also recorded an increase, with the futures price for delivery in March 2025 reaching 6,720 USD/ton, an increase of 60 USD/ton.

This sudden price increase is causing businesses and investors in the international market to raise many questions about the factors affecting it, especially in the context of supply-demand and weather fluctuations in major coffee producing countries.

Ms. Nguyen Thi Chien in Dak Ha ( Kon Tum ) has 4 hectares of coffee, said that the price of coffee has never increased as much as this year during the season. She said that in October, she harvested and sold coffee at 115,000 VND/kg and now the dealer is quoting more than 120,000 VND/kg while at the same time last year it was only more than 50,000 VND/kg.

According to Ms. Chien, some surrounding households do not have drying yards or warehouses and often sell fresh coffee at 26,000 VND/kg, 4 times higher than 4 years ago.

"My family has harvested more than 50% of the garden, is drying it and will store it until after Tet to see how the market situation is before considering selling it" - Ms. Chien stated her plan.

Source