Coffee and pepper are the main agricultural products of the Central Highlands people. Both of these agricultural products entered the "race" to increase prices from the second half of 2023, and it is forecasted that both pepper and coffee prices may continue to rise and maintain high levels in the near future due to supply shortages and adverse weather conditions.

PEPPER PRICES CONTINUE TO RISE SHARPLY

According to the Vietnam Pepper and Spice Association (VPSA), in the first four months of 2024, Vietnam exported 83,067 tons of various types of pepper, with a total export turnover of 352 million USD. Compared to the same period last year, the export volume decreased by 19.4%, but the turnover increased by 10.3%.

In the first four months of 2024, the average export price of pepper reached 4,214 USD/ton, an increase of 36.4% compared to the same period last year.

VPSA stated that Asia currently accounts for 36.2% of Vietnam's total pepper export volume, but in the first four months of 2024, export volume to this region decreased by 52% compared to the same period in 2023. The most significant decrease was in the Chinese market, down by 95.2%, and the UAE, down by 23%.

India is currently the largest importer of Vietnamese pepper in Asia in the first four months of the year, with 5,552 tons, accounting for 6.7% and increasing by 23.9% compared to the same period. Exports also increased in some markets such as South Korea, up by 157.4%, Pakistan, up by 59.7%, and the Philippines, up by 18.5%.

"In the first four months of 2024, the average export price of pepper reached 4,214 USD/ton, an increase of 36.4% compared to the same period last year."

According to the Vietnam Pepper and Spice Association.

Pepper exports to the Americas increased by 40.6% and accounted for 30.2% of the export market share. The United States is currently the largest single export market for Vietnamese pepper, with a volume of 22,774 tons, up by 45.2% compared to the same period in 2023 and accounting for 27.4% of the total export volume.

Europe accounts for 26.8% of Vietnam's pepper export market share, up by 33.6% compared to the same period last year; the leading markets are Germany, up by 104.7%; the Netherlands, up by 52.8%; and Russia, up by 68.7%.

Meanwhile, in Africa, export volume decreased by 4.7%. However, the traditional market of Egypt is showing positive signs with export volume increasing by 10.7%, reaching 1,977 tons after the Egyptian government provided foreign currency support for importing goods.

Regarding domestic pepper prices, with a strong increase this week, pepper prices are now nearly 10,000 VND/kg higher than coffee prices. Last week, pepper and coffee prices were equivalent: 101,000 – 102,000 VND/kg.

However, from May 16, global pepper prices suddenly increased sharply, causing domestic pepper prices to soar by an additional 11,000 – 12,000 VND/kg. Currently (as of May 21), the highest pepper price is 112,000 VND/kg recorded in Dak Nong and Dak Lak. The common price in the southeastern provinces and the Central Highlands is 111,000 VND/kg.

The recent sharp increase in pepper prices is due to limited supply while demand from the US, China, and the EU is increasing. On international exchanges, black pepper prices continue to rise and are currently at 4,900 – 5,200 USD/ton; white pepper ranges from 6,500 – 7,300 USD/ton depending on the type.

According to VPSA, in recent years, prolonged low pepper prices have led to a reduction in acreage. Old pepper gardens have been replaced by other crops, especially durian, which has driven pepper prices continuously higher in recent times.

COFFEE PRICES TEMPORARILY STOP RISING BUT REMAIN AT RECORD HIGHS

On the New York exchange, arabica coffee prices traded on Monday (May 20) for July 2024 shipments closed slightly up by 0.10 cents/pound compared to the end of last week. Meanwhile, robusta coffee prices on the London exchange closed down by 19 USD, at 3,499 USD/ton. The recovery of ICE coffee stocks contributed to the slight decrease in robusta coffee prices yesterday (May 20).

However, according to analysts, there is still a lot of good news supporting coffee prices, as the Brazilian real has risen to its highest level in 1/2 weeks against the USD. A stronger real will limit the selling power of Brazilian coffee producers.

Meanwhile, insufficient rainfall in Vietnam and Brazil remains a concern that could limit production and boost buying activity. The supply of robusta coffee remains scarce from Vietnam and is expected to continue until the new crop season.

The Vietnam Customs Department reported last Friday that Vietnam's coffee exports in April decreased by 19.5% compared to the same period last year, to 152,073 tons.

"Since the beginning of May 2024, coffee prices have stabilized, currently fluctuating between 101,000-103,000 VND/kg. However, this is still the highest record price ever for coffee."

Vietnam Coffee and Cocoa Association.

According to the Vietnam Coffee and Cocoa Association, last year's El Nino weather event supported coffee prices to rise in recent times. Currently, the coffee-growing regions of the Central Highlands have had rain, but information from many forums of Vietnamese coffee growers shows that the rain seems to have come too late to save the fruit for the 2024/2025 harvest season, which will be harvested in October 2024. In some places, it may not even save the trees.

Looking back many years, pepper prices were always 2-3 times higher than coffee prices. However, pepper prices continuously fell during the 2016-2020 period and by 2029 had dropped below 40,000 VND/kg, equal to coffee prices. In 2023, coffee prices skyrocketed and surpassed pepper prices by 30,000 – 40,000 VND/kg.

Information about reduced supply and increased demand has caused coffee prices to continuously rise over the past year, from 38,000 VND/kg in January 2023, to 80,000 VND/kg on February 15, 2024, reaching 100,000 VND/kg at the end of April 2024.

According to the Ministry of Agriculture and Rural Development, Vietnam's coffee exports in April 2024 reached 170,000 tons, with a turnover of more than 644 million USD, an increase of 3.9% in volume and a strong increase of 61.5% in turnover compared to the same period in 2023.

Accumulated in the first four months of 2024, Vietnam's coffee exports reached nearly 756,000 tons, with a turnover of more than 2.57 billion USD, an increase of 5.4% in volume and a strong increase of 57.9% in turnover compared to the same period in 2023. The average export price of coffee in April 2024 continued to increase, reaching 3,791 USD/ton, an increase of 55.4% compared to the same period in 2023.

Due to the continuous increase in domestic coffee prices due to shortages, some export manufacturers have reported that they have not been able to buy goods for more than a week, causing production capacity to drop sharply by 30-70%. Export contracts have also been suspended because high prices have caused partners to shift to importing goods from India, Brazil, and Indonesia. This situation is expected to continue until the coffee price fever cools down and global supply increases.