Two years ago, the export price of Robusta coffee was only half that of Arabica coffee, but now the situation has completely changed.

According to data from the Vietnam Coffee-Cocoa Association (VICOFA), in May, exporters shipped 71,569 tons of Robusta coffee at $3,920 per ton, compared to 6,831 tons of Arabica coffee at $3,888 per ton.

Thus, the export price of Arabica coffee is now $32 per ton lower than Robusta. Mr. Phan Minh Thong, General Director of Phuc Sinh Corporation (the 7th largest exporter of coffee beans for the 2022-2023 season), stated that this is an unprecedented occurrence in the history of the coffee industry over the past 50 years.

“In fact, Robusta coffee prices have been higher than Arabica for some time, but this has only recently been reflected in statistical reports due to previous contracts being priced at old rates” Mr. Thong explained.

For example, in the 2021-2022 coffee season (from October of the previous year to September of the current year), the average export price of Robusta coffee was $1,980 per ton, while Arabica coffee was $4,333 per ton (almost 2.2 times higher). By the 2022-2023 season, this gap narrowed as Arabica fell to $4,071 per ton while Robusta increased to $2,180 per ton.

According to VICOFA, Vietnam primarily produces Robusta coffee (accounting for over 94% of the area and production), while Arabica coffee (mainly Catimor variety) has a smaller share.

This means that the Vietnamese coffee industry has benefited from this unusual price shift between the two main types of coffee in the world.

As of the latest update from Mr. Thong, the price of Robusta coffee has risen to $5,200 – $5,500 per ton, while Arabica coffee ranges from $4,000 – $5,200 per ton (depending on the type).

The reason for this change is that previously, roasters and processors gradually altered their formulas to use more Robusta coffee due to its lower price and higher profit margins. As Robusta use increased and supply became constrained, its price went up, while the roasting and processing formulas could not adjust instantaneously.

“With the current market prices, roasters will certainly have to find ways to revert to old formulas, though the exact timeframe for this is uncertain” Mr. Thong stated.

From the perspective of coffee growers, Mr. Nguyễn Hữu Long, Director of the Vietnam Coffee Academy VCA (Gia Lai Province), mentioned that Arabica coffee prices used to be more than twice as high as Robusta. Arabica cultivation is only suitable for certain high-altitude and soil conditions, leading to lower yields and higher production costs compared to Robusta.

Some experts suggest that while Arabica coffee was previously considered higher quality than Robusta, the recent trend of using Robusta in coffee products and its growing market preference may challenge this perception.

Source: Vietstock