How Vietnam Coffee Prices Are Shaping US Demand
Vietnam coffee prices have climbed high enough that US traders are now watching whether demand will hold. Coffee futures stopped rising last week as JM Smucker Co., owner of Folgers and Cafe Bustelo, announced more price increases tied to import tariffs. US inventories still cover roughly 30 to 40 days of purchased and in-transit supply, so the added cost has not yet reached American shoppers at the register.
Vietnam's coffee export revenue topped $560 million in July, reaching $3.6 billion for the first seven months of the year, according to the Vietnam Coffee and Cocoa Association. Vicofa president Nguyen Nam Hai called the international market unusually favorable. Deep-processed output, including roasted, instant, and specialty coffee, makes up only 12 to 15 percent of Vietnam's exports, against 30 to 40 percent in Brazil and Colombia.
According to CoffeeHunters(/), the upward trend in coffee futures prices seems to have temporarily halted last week. Market participants were hit by news from the US market and are worried that the price increase will curb demand in the United States. For example, JM Smucker Co., a major coffee supplier in the US market, which owns the Folgers and Café Bustelo brands, has announced further price increases to keep up with the increase in coffee import tariffs.
As the consulting firm Pharos Consultoria said, all coffee shipped from Brazil before August 5 must arrive in the United States before October 5 without paying tariffs. The United States still has about 30 to 40 days of inventory, including what has been purchased, shipped, and is about to arrive. The higher costs have not yet been passed on to US end consumers.
At the same time, the sharp increase in coffee prices continues to bring record revenues to Vietnam. In July, Vietnam's coffee export revenue exceeded $560 million, bringing the total for the first seven months of this year to $3.6 billion.
Nguyen Nam Hai, President of the Vietnam Coffee and Cocoa Association (Vicofa), said in an interview with Vietnam News that the international coffee market has never been so favorable. Due to high prices, growing demand, and stable supply in Vietnam, the country is in a favorable position. To fully take advantage of this opportunity, Vietnam needs to study processing more deeply instead of relying on raw bean exports. According to Vicofa, deep-processed coffee, including roasted coffee, instant coffee, and specialty coffee, currently accounts for only 12 - 15% of the total exports. Compared with the potential of the product, this figure is not large. The same source said that in Brazil and Colombia, this proportion is between 30% and 40%.
The above content is compiled by CoffeeHunters, a coffee news website.
