MASCOPEX

Social distancing around Vietnam has limited the supply of coffee in the international market, resulting in prices remaining “relatively high” into 2022.

Recently, CNBC news agency cited a forecast of Fitch Solutions about the world coffee price situation and mentioned Vietnam with the advantage of being the second largest coffee exporter in the world. According to customs data, in August, Vietnam's coffee exports decreased by 8.7% compared to July, to 111,697 tons. In the first 8 months of the year, Vietnam exported 1.1 million tons of coffee, down 6.4% over the same period last year, but the turnover increased 2%, reaching about 2 billion USD.

Falling coffee exports from Vietnam and falling output in other leading coffee producing countries have pushed up world coffee prices sharply. Prices for arabica coffee futures are up about 45.8% this year, while robusta prices are up 52.2%, according to data from Refinitiv.

Brazil, the world's largest coffee exporter, has experienced extreme weather events that have damaged coffee farms. Bad weather also reduces coffee production in Colombia. “Additionally, we expect that, at least in the US and Europe, demand will increase in the coming months as the lifting of anti-Covid restrictions allows coffee shops to reopen,” the report said. of Fitch Solutions commented.

The consulting firm raised its forecast for the average price of arabica coffee in 2021 from $1.35/pound to $1.60/lb. The forecast for the average price of arabica coffee in 2022 is raised from 1.25 USD/pound to 1.5 USD/pound.

Fitch Solutions believes that anti-Covid restrictions in Vietnam will be eased gradually, so the interruption of Vietnam's coffee exports may only be a temporary issue. Besides, Brazil's coffee production is likely to recover "quite quickly" as long as extreme weather does not return. This means that the global supply of coffee could start to increase again in the 2022-2023 crop year, with the average price of arabica coffee in 2023 possibly falling to 1.2 USD/pound – Fitch Solutions forecasts . “The ongoing government support measures will help improve coffee production in many of the key coffee producing countries in Latin America and Asia, including Colombia and Vietnam,” the report reads. “Additionally, growth in demand for coffee is likely to peak in many of the largest coffee consuming countries, such as Europe and Japan.”

The average export price of Vietnamese coffee reached $2,012 per ton in August, the highest level since November 2018.

In the first eight months of 2021, Vietnam's average coffee export price reached 1,864 USD/ton, an increase of 8.9% compared to the first 8 months of 2020. In which, the average export price of Vietnam's coffee to Vietnam. most markets rose, except China. However, the Import-Export Department (Ministry of Industry and Trade) said that the complicated development of the Covid-19 wave had negatively affected Vietnam's coffee exports in August 2021. Statistics from the General Department of Customs show that Vietnam's coffee exports in August 2021 decreased for the 5th consecutive month, reaching 111.7 thousand tons, worth $224.75 million, down 8.7 % in volume and 4.4% in value compared to July 2021. But compared to August 2020, an increase of 11.5% in volume and 22% in value.

In the first 8 months of 2021, Vietnam's coffee exports reached 1.08 million tons, worth over 2 billion USD, down 4.4% in volume, but up 2% in value over the same period in 2020. 

Regarding export markets, Vietnam's coffee exports to most of the main markets increased, except for the United States, Spain, Belgium, and the Philippines. Generally, in the first 8 months of 2021, coffee exports to many key markets decreased, except for Japan, Russia, and China. Particularly for the US market, in the first 7 months of 2021, the US reduced coffee imports from Colombia and Vietnam. Statistics from the International Trade Center show that US coffee imports from Vietnam in the first seven months of 2021 reached 76.47 thousand tons, worth $147.36 million, down 28.4% in value. volume and decreased by 27.2% in value compared to the first 7 months of 2020.

Vietnam's coffee market share in total US imports also fell from 11.31% in the first 7 months of 2020 to 8.17% in the 7 months of 2021. The Import-Export Department added that the above price increase was also recorded at the port of Ho Chi Minh City, Robusta coffee for export grade 2, 5% black broken rate, traded at the price of 2,161 USD/ton, the difference. +24 USD/ton, up 4 USD/ton (equivalent to an increase of 0.2%) compared to September 8, 2021.

Forecasting in the short term, robusta coffee prices fluctuate in an uptrend, but the increase is not large. The supply of coffee from Southeast Asia has not improved, but concerns about the global economic slowdown and very low trading volume will restrain the price increase of this commodity. In the mid-September, 2021, the price of robusta coffee in the domestic market continued to increase according to the world price, the increase slowed down. On September 18, 2021, the domestic price of robusta coffee increased from 200 VND/kg (equivalent to an increase of 0.5%) compared to September 8, 2021, to 39,600 - 40,500 VND/kg.

Cambodian exports to Vietnam reached $3.5 billion in the first eight months of 2021, up 423 per cent over the same period of 2020 and resulting in Vietnam posting a trade deficit with its neighbor of $355 million.

According to statistics of the General Department of Vietnam Customs, in the first eight months of 2021, the import and export turnover of goods between Vietnam and Cambodia reached US$6.653 billion, up 97.2% over the same period in 2020. Expected 2021 , import-export turnover between the two countries reached nearly 9 billion USD.

In which, Vietnam's exports to Cambodia reached 3,149 billion USD, up 16.5% and Cambodia's goods exported to Vietnam reached 3,504 billion USD, up 423% over the same period in 2020. Thus, in the first 8 months of 2021, Vietnam had a trade deficit of 355 million USD from Cambodia, mainly 2 agricultural products such as cashew nut with 1.829 billion USD, rubber 823 million USD for processing and manufacturing raw materials for export. export. Regarding the group of goods exported to Cambodia, in the first 8 months of 2021, there were 21/29 groups of products with positive growth compared to the first 8 months of 2020.

Typically, vegetables and fruits reached 13.79 million USD, up 186.17%; animal feed and raw materials reached $102.42 million, up 29.45%; petrol and oil of all kinds reached USD 253.79 million, up 51.37%; chemicals reached USD 28.02 million, up 57.84%; fertilizers of all kinds reached USD 133.83 million, up 65.95%; plastic raw materials reached 18.11 million USD, up 45.98%; wood and wood products reached 14.52 million USD, up 42.93%; fibers of all kinds reached USD 51.11 million, up 137.24%... However, there are also 8/29 items with negative growth compared to the first 8 months of 2020, such as: seafood, coffee, confectionery and grain products, clinker and cement, ceramic products, common metals and metal products, furniture products… In the first 8 months of 2021, there were 10/11 groups of imported Vietnamese goods with positive growth compared to the same period in 2020.

Specifically, vegetables, tubers and fruits reached 30.49 million USD, up 59.16%; cashew nuts reached 1,833 million USD, up 610.16%; corn reached USD 79,440 new export items of Cambodia; soybeans reached 1.83 million USD, up 548.99%; rubber reached 822.80 million USD, up 433.87%... In 2020, import and export turnover between Vietnam and Cambodia reached US$ 5,327 billion, up 0.84% compared to 2019. In which, Vietnam's goods exported to Cambodia reached US$ 4.149 billion, down 5.3% and Cambodian goods exported to Vietnam reached 1.178 billion USD, up 30.9% compared to 2019.

Housing rentals, food prices, electricity prices, and school fees all fell in September, which in turn contributed to pushing down the consumer price index (CPI) for the month, which decreased by 0.62 per cent compared to August.

Data released by the General Statistics Office on September 29 showed that, compared with the same period last year, September CPI increased by 2.06%; Average CPI in the third quarter of 2021 increased by 2.51%. In the first nine months of 2021, CPI increased by 1.82% year-on-year, the lowest increase since 2016. In September, there were 5 groups of goods and services with a decrease in price index, 6 groups with an increase in price index. Specifically, the education group had the largest decrease with 2.89%, reducing the overall CPI by 0.18 percentage points because some localities implemented tuition fee exemption and reduction for the 2021-2022 school year in the context of the Covid-19 epidemic.

Complicated developments made the price index of educational services decrease by 3.35%. But if calculating the first 9 months of the year, the price of educational services increased by 3.76% over the same period last year (making the overall CPI increase by 0.2 percentage points) due to the influence of the tuition fee increase for the new school year 2020-2021. according to the roadmap of Decree No. 86/2015/ND-CP dated October 2, 2015 of the Government.

The group of housing and construction materials in September decreased by 1.99%, causing the general CPI to decrease by 0.37 percentage points. The main reason is that the rent price decreased by 1.99% (making the general CPI decrease by 0.21 percentage points) to support people during the implementation of social distancing. Besides, electricity prices decreased in the provinces and cities directly under the Central Government implementing social distancing according to Directive No. 16/CT-TTg and the weather in the fall, so the demand for electricity and water decreased, causing electricity prices to decrease. electricity price decreased by 4.96% (making the general CPI decrease by 0.16 percentage points) and the price of domestic water by 1.66%.

The average electricity price in 9 months of 2021 decreased by 0.99% compared to the same period in 2020 as the CPI overall decreased by 0.03 percentage points. Although gasoline and oil prices were adjusted up on September 10, 2021 and September 25, 2021, but due to the impact of the reduction on August 26, 2021, the gasoline price index in September 2021 decreased by 0 .38%, diesel oil price decreased by 0.39%.

In the first 9 months, the domestic gasoline price increased by 24.8% over the same period last year (making the overall CPI increase by 0.89 percentage points), the gas price increased by 21.7% (making the overall CPI increase by 0.32 points). percent). Along with that, the price of used cars decreased by 0.74% because the dealers faced financial difficulties, so they reduced the prices of many types of vehicles, causing the traffic group to decrease by 0.16%. Food and food service groups decreased by 0.16% due to abundant supply.

Post and telecommunications group decreased by 0.06%, focusing on the decrease in prices of mobile phones and tablets. In addition, 6 groups of goods and services have increased price index. Beverages and tobacco, for example, had the highest increase with 0.17%, mainly due to a 0.48% increase in cigarette prices as transportation costs increased and supply was limited.

The group of appliances and household appliances increased by 0.09% due to the demand for refrigerator equipment; computers and accessories; printers, projectors, and scanners increased sharply during the period of social distancing (up 0.3%, 0.29% and 0.46% respectively).

The group of medicines and medical services increased by 0.03% due to the rapid and complicated development of the Covid-19 epidemic, and localities speed up the speed of vaccination against epidemics, so the demand to buy medicines and medical equipment increased. prices of all kinds of drugs increased by 0.11%.

The group of garments, hats and footwear increased by 0.02%. The group of culture, entertainment and tourism increased by 0.01% mainly due to the price of flowers and ornamental plants increasing by 0.92%... Therefore, core inflation in September 2021 decreased by 0.26% compared to the previous month, increased by 0.74% over the same period last year. The average core inflation in the first nine months of 2021 increased by 0.88% over the same period in 2020.