Can Vietnam and Indonesia Compensate for Brazil’s Decline in Coffee Production?
As coffee enthusiasts around the world watch with concern the decline in Brazil’s coffee production this year—and with projections suggesting that next year’s output could be the lowest in decades—news from Vietnam and Indonesia has come to ease some of these worries.
The U.S. Department of Agriculture (USDA) in its latest semi-annual report predicted a significant increase in global coffee production for the 2024-2025 season, driven by a recovery in production in Vietnam and Indonesia. Global output is expected to reach 174.9 million 60-kg bags, an increase of 6.9 million bags compared to the previous season. However, rising global coffee consumption is likely to reduce ending stocks, adding further pressure to supply.
Vietnam, the world’s second-largest coffee producer, is projected to produce around 30.1 million bags, an increase of 2.6 million bags compared to the previous season. Despite this improvement, production remains below the record set in the 2021-2022 season. With greater supplies available, Vietnam’s coffee bean exports are expected to rise by 1.8 million bags, reaching 24.4 million bags.
Nguyen Nam Hai, Chairman of the Vietnam Coffee and Cocoa Association, noted that rising global coffee prices have also pushed domestic prices to unprecedented levels. In regions like Dak Lak, Lam Dong, and Dak Nong, coffee prices ranged between 121,800 and 122,700 Vietnamese dong per kilogram (approximately $4.81–$4.84), reflecting an increase of up to 11,000 dong per kilogram compared to earlier this month.
In Indonesia, coffee production is expected to recover by approximately 2.8 million bags, reaching 10.9 million bags, thanks to favorable agricultural conditions in regions like South Sumatra and Java. Robusta production is projected to account for approximately 9.5 million bags of the total, while Arabica contributes 1.4 million bags. This increase in production translates to a rise in exports by 2.2 million bags, totaling 6.5 million bags annually.
Meanwhile, Brazil, the world’s largest coffee producer, is expected to see only a slight increase in production, reaching 66.4 million bags. Arabica production is forecast to rise by 500,000 bags to 45.4 million bags, while Robusta production is expected to decline by 400,000 bags to 21 million bags. Adverse weather conditions, such as drought and high temperatures, have negatively impacted productivity. Consequently, Brazil’s coffee exports are forecast to decline by 2.6 million bags, totaling 40.5 million bags, mainly due to depleted stocks from the previous season.
Global coffee consumption is expected to rise by 5.1 million bags, reaching 168.1 million bags, with the largest increases in the European Union, the United States, and China. Despite the rise in production, global ending stocks are forecast to decline by 1.5 million bags, reaching 20.9 million bags.
In parallel, Vietnam’s coffee export revenues are projected to reach a record $5.6 billion in 2024. This growth comes as global coffee prices surge, offsetting a 13.5% decline in export volumes. Between January and November 2024, Vietnam exported approximately 1.2 million tons of coffee, generating nearly $5 billion in revenue—an increase of 38.1% compared to the same period last year.
As the new harvest season begins, farmers and traders are closely monitoring price fluctuations. Many farmers are deliberating whether to sell their coffee stock immediately or hold onto it in anticipation of further price increases, especially given the limited supply from other coffee-producing countries.
These developments highlight the dynamic nature of the global coffee market. As production and demand both rise, the question remains: Can Vietnam and Indonesia bridge the gap created by Brazil’s challenges? The coming months will reveal more.
