HANOI – Prices for two of Vietnam's key agricultural exports, coffee and black pepper, are climbing sharply in the domestic market, driven by mounting concerns over scarce supplies and renewed purchasing activity. The price surge signals potential upward pressure on global markets, as Vietnam is the world’s largest producer of robusta coffee and a dominant force in the pepper trade.
Coffee Prices Approach Record Highs on Supply Crunch
Domestic coffee prices are continuing their relentless ascent, nearing the significant milestone of VND 123,000 per kilogram (approximately $4.85/kg). This latest rally is primarily attributed to a severe shortage of physical beans within the country.
The current 2024-2025 crop season has been marked by lower-than-expected yields due to unfavorable weather conditions earlier in the year. Many farmers, having sold a significant portion of their harvest at lower prices months ago, are now left with minimal stock. The few who are still holding onto their beans are reluctant to sell, anticipating that prices could climb even higher as the supply dwindles further before the next harvest season begins late in the year.
"The supply situation is critical," said a trader based in Dak Lak, a key coffee-growing province. "Exporters are struggling to source enough beans to fulfill their existing contracts. Farmers who still have coffee are in a strong negotiating position and are holding out for better prices, which is fueling the daily price increases."
This domestic scarcity in Vietnam is having a direct impact on the global robusta market, contributing to higher futures prices on the London exchange and affecting costs for international roasters and coffee brands that rely heavily on Vietnamese beans.
Pepper Rebounds After Period of Stability
In a parallel trend, domestic pepper prices have broken out of a recent consolidation period and have begun to climb again. After several days of trading sideways, prices have rebounded to a range of VND 141,000 to VND 144,000 per kilogram (approximately $5.55 - $5.67/kg).
The renewed upward momentum is reportedly being driven by a combination of factors. Market insiders suggest that exporters are stepping up their purchasing to meet new orders from key markets like the United States, the European Union, and China. With inventories from the last harvest gradually depleting, the increased demand is putting immediate pressure on available supply.
"We've seen buying interest pick up this week," commented an analyst from the Vietnam Pepper and Spice Association (VPSA). "The market was quiet for a bit, but now that inventories are tighter, any significant new demand is enough to move prices upward. We expect this firm trend to continue as long as export demand remains steady."
The simultaneous price hikes for both coffee and pepper underscore the supply-side vulnerabilities in Vietnam's agricultural sector. For global buyers, the message is clear: the era of cheap commodities is on hold, as tight domestic supply in the world's top producer continues to dictate a bullish market.
