Using railway to remove difficulties for coffee export?

One suggestion for coffee exporters is to transport goods by rail to reduce costs and transport burden.

In the morning of August 4, in Lam Dong province, coffee was purchased with the lowest price of 35,900 VND/kg; In Dak Lak province, the price of coffee was purchased at 36,900 VND/kg, reaching the highest level.

On the world market, after raising the margin level, eliminating retail speculators and after 2 sessions of deep decline, on the 3/8 session, financial hedge funds started buying. This stimulated two-floor coffee prices in the UK and the US to increase. The trend is expected to continue until the end of the week.

At the end of the latest trading session, the price of Robusta coffee in London for September delivery increased by $19/ton at $1,772/ton, for November delivery, increased by $21/ton at $1,787/ton.

Meanwhile on the New York Stock Exchange, the price of Arabica coffee delivered in September 2021 increased by 2.05 cents/lb at 174.85 cents/lb, delivered in December 2021 increased by 2.1 cents/lb at 177.85. cents/lb.

Previously, the two coffee floors mentioned above witnessed a strong sell-off week after a continuous increase in prices, leading to a further decrease in prices at the beginning of this week and still due to frost information in southern Brazil's coffee regions. minimal harm.

In July 2021, the world coffee price leveled off in the early days of the month compared to the end of June 2021, but then rose sharply again. In the last days of July 2021, world coffee prices continuously recorded at historic highs. Severe frosts in Brazil and limited supply from Vietnam caused coffee prices to rise sharply.

According to experts, the sharp decline on the two coffee floors last week showed that the information on supply and demand, the impact of frost on coffee prices was not equal to capital flow.

“July, the market witnessed two coffee floors with very strong price fluctuations, helping to bring the domestic coffee price to the highest level in this crop year. The next movement this week has not allowed the price to find that top again, even at the beginning of the week, London coffee price also adjusted according to the "reversal" technique, so that the price could go down further, "said this expert.

According to the Import-Export Department (Ministry of Industry and Trade), Vietnamese coffee has been exported to more than 80 countries and territories, accounting for more than 14% of the global green coffee export market share, ranking second in the world after Brazil. .

It is estimated that Vietnam's coffee exports in July 2021 reached 110 thousand tons, worth 207 million USD, compared to July 2020, stable in volume, but up 5.9% in value.

In the first 7 months, coffee exports were estimated at 953 thousand tons, worth 1.754 billion USD, down 9.3% in volume and 1.7% in value compared to the first 7 months of 2020.

In the second quarter of 2021, the price of coffee in the domestic market fluctuated according to an upward trend compared to the first quarter of 2021 and lasted until July 2021.

The value of coffee exports in the second quarter of 2021 to most major markets decreased compared to the first quarter of 2021, except for Russia, Spain, Belgium, China, Algeria, Thailand, and the United States. In the first 2 quarters of the year, Robusta coffee exports reached 729.7 thousand tons, worth 1.15 billion USD, down 9.3% in volume and 3.1% in value compared to the first 6 months of 2020.

Rail transport to US and EU?

It is forecasted that in the last 5 months of the year, coffee exports will continue to focus on two major markets, which are the EU, which accounts for 40% of coffee exports, and the US, which accounts for 20% of Vietnam's coffee exports.

However, currently, freight rates for Asian routes to Europe and North America continue to rise, the shortage of containers has not been overcome and is expected to continue. Coffee importers do not want to sign FOB contracts, but want the seller to bear all costs including transportation, insurance, etc., making coffee exports difficult.

The Covid-19 epidemic is still complicated, Vietnam has to social distance on a large scale, affecting production and transportation of goods, so the upcoming coffee exports will still face difficulties. many difficulties. Besides, the shortage of empty containers continues to cause a sharp increase in costs, reducing the competitiveness of coffee in the world market.

This is not only the difficulty of Vietnam, but most of the exporting countries in Southeast Asia share the same difficulty in logictics.

To solve logistics problems, the Vietnam Coffee - Cocoa Association (VICOFA) has just suggested to export businesses to transport goods by rail to reduce costs and transport burden. Shipping time to the US and EU lasts up to 25 - 27 days, but the price is reasonable and the quality of export coffee is dry, the quality is not affected during transportation, so this suggestion is being taken into account.