topic the price movements of robusta coffee in vietnam

Grasping Robusta coffee’s price in Vietnam, we are able to provide important information to businesses and investors about market fluctuations, due to which they can choose out their bus

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Table of Contents

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2 Analyzing factors affecting Viet Nam’s Robusta coffee demand between 2019-

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3 Analyzing factors affecting Viet Nam’s Robusta coffee supply between 2019-

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4 “Thr€AÍS GÀ HT HT Ho HH 19 4.1, Competition in the HIGTĂCÍ co Họ Thọ nhe 19 4.2 Challenges in resource management and environmental protection 20 Reference Docum€nfs . - 5 + HH th HT nh 21

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Introduction

Firstly, Robusta Coffee has emerged importantly in Vietnam's economy As one of the key products in agriculture, it has been not only a significant contribution im exportation and country’s income but also has created a job for millions of Vietnamese farmers Analyzing the price of Robusta coffee help us understanding more about price structure

of this factory and its role in Vietnam economic

Secondly, the Robusta coffee market in Vietnam has impacted the global coffee market Vietnam is one of the biggest Robusta coffee manufacturers and exporters in the world Grasping Robusta coffee’s price in Vietnam, we are able to provide important information

to businesses and investors about market fluctuations, due to which they can choose out their business and finance decisions

Thirdly, influencing factors to Robusta coffee’s price is variable and complicated, from weather, fluctuations in commodity prices to government policy Analyzing these factors

is said to predict price in future, help managing risks and give suitable business strategy

Finally, analyzing Robusta coffee in Vietnam not only give a deep information of the coffee industry but also open opportunity gates for research and applications in Vietnamese business and agricultural development

In this essay, we embark on a retrospective analysis of price movements in the Robusta coffee market in Vietnam between 2019 and 2023, seeking to unravel the underlying drivers, trends, and implications thereof Through a combination of empirical research, industry insights, and economic theory, we aim to elucidate the complexities of the Vietnamese coffee market and its significance for stakeholders within and beyond the country's borders

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Chapter 1: General theory

1 Definition of demand and supply

1.1 Definition of demand

“* Definition: Demand is a curve/schedule showing quantities that consumers are willing and able to purchase at each alternative price, at a specific point in time (other things constant) Other things are non-price determinants of demand (Things that determine consumers buying the good other than good’s price)

“* Quantity demand (Qd): the amount of the good that consumers are willing or able

to purchase

Quantity

Demanded

+* Market demand and Individual demand:

- Individual demand 1s the quantity demand of each buyer for each price

- Market demand is the sum of quantity demand by all buyers at each price

“* Demand curve shifters:

- Demand curve shows how price affecting quantity demanded, other things being equal

- Itis shifted when other things change

“+ Things shift demand curve:

- Income:

¢ Demand for a normal good is positively related to income because the increasing income causes an mcrease in quantity demanded at each price, shifts the demand curve to the right

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¢ However, demand for an inferior good is negatively related to income due to the increase in income causes decreasing in quantity demanded at each price, shifts demand curves for inferior goods to the left

Price per Can

Quantity

- Prices related goods:

¢ Substitutes: Two goods are substitutes if an increase in the price of one causes an increase in demand for the other Example: Increasing in price

of Arabica Coffee causes the increase of demand for Robusta Coffee, the demand curve of Robusta Coffee shifts to the right

¢ Complements: Two goods are complements if an increase in the price of one causes a fall in demand for the other Example: Condensed milk and milk coffee If the price of condensed milk rises, people buy fewer condensed milk, therefore less milk coffee Milk coffee demand curve move to the left

“* Tastes:

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- Anything that causes a shift in tastes toward a good will increase demand for that good and shift its D curve to the right Example: Salt coffee become popular in 2023 so the demand of coffee increase and demand curve shifts

to the nght

“* Expectations

- They affect consumers’ buying decisions Example: If people expect their incomes to rise, their demand for drinking coffee more for a week will increase now

1.2 Definition of supply

“+ Definition

- Supply (S) is a curve/schedule that shows the quantities that producers are willing and able to offer at each alternative price, at a specific point in time (other things constant)

- Other things are non-price determinants of supply

“* Quantity supplied (Qs)

- Itis the amount that sellers are willing and able to sell

Quantity Supplied Overview

“* Market Supply and Individual Supply

- Individual Supply: the quantity supplied is able to sell by sellers

- Market Supply: the sum of the quantities supplied by all sellers at each price

“+ Supply Curve Shifters

- The supply curve shows how price affects quantity supplied, other things (non-price determinants of supply) being equal

- Changing in other things shift supply curve

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s* Things change supply curve

- Input Prices: A fall in input prices makes production more profitable at each output price, so firms supply a larger quantity at each price, and the S curve

Chapter 2: In depth analysis of Robusta coffee

1 Price movement of Robusta coffee in Vietnam for 5 years

The price of Robusta coffee in 5 years (VND/KG)

- 2020: In this year, COVID-19 occurred and made the economy go down, including Robusta coffee factory Consumers decreased their quantity demanded to save more money in this disease Due to that, the surplus quantity was higher than it in

2019, price dropped to about 32,500 VND/KG

- 2021-2022: Worried about the elasticity in supply, the quantity of demand in whole world rose and pushed the price of Robusta coffee in Vietnam to 46,500 VND/KG

- 2023: Because of El Nino and economic hardship, the price of coffee changed incredibly Robusta coffee was more popular than Arabica coffee Due to its lower price, people bought Robusta more than Arabica, the quantity demanded of Robusta coffee rose and caused the elasticity After that, the price of Robusta coffee in this period was about 66,400 VND/KG

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2 Analyzing factors affecting Viet Nam’s Robusta coffee demand between 2019-

2023

2.1, Economic Conditions

Economic conditions deeply influence the demand for coffee among

consumers In a developed economy, as personal income rises, consumers often have more spending power for luxury consumer goods like coffee Conversely, in difficult economic times, coffee consumption may decrease due to cost-saving measures

2.2 Culture and Lifestyle

In Vietnamese culture and lifestyle, coffee is not just a beverage but also an integral part of daily life Vietnam has a deep tradition of coffee consumption, from using traditional filters to brew rich coffee to enjoying coffee at local cafes or large coffee chains The habit of drinking coffee has become an indispensable part

of daily life and an important social gathering point for many people

Reasons of drinking coffee

@ Pleasure

ø Increasing concentration

Awaking Relaxing, chating

2.3 Product Diversity:

In the Vietnamese coffee market, product diversity is an important factor attracting consumer interest From traditional phin-filtered coffee with the robust and distinctive flavor of Vietnamese coffee, to variations like iced coffee, all preferences are catered to

Additionally, combining coffee with other ingredients such as condensed milk, egg, or fresh milk creates unique and enjoyable experiences for consumers This diversity not only enriches sensory experiences but also reflects the flexibility and creativity in how Vietnamese people enjoy coffee

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2.4 Advertising and Trends:

In the Vietnamese coffee market, advertising and trends play a crucial role in stimulating coffee consumption The advertising and marketing strategies of renowned coffee brands are becoming increasingly powerful and creative, capturing consumer attention and generating new trends

By leveraging media channels and social networks, coffee brands not only advertise their products but also build brand images and create unique experiences

to attract and retain customers These efforts not only increase sales but also influence consumer preferences and trends, creating new trends in coffee consumption in Vietnam

2.5 Health and Lifestyle:

Consumers are increasingly aware of the health benefits of coffee, not only in terms of its ability to stimulate the mind but also its positive effects on health Studies have shown that coffee can improve mood, enhance concentration, and reduce the risk of certain diseases, while still maintaining consideration for moderate consumption Therefore, this awareness has driven the demand for coffee not only for enjoying its flavor but also for maintaming a healthy and balanced lifestyle

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3 Analyzing factors affecting Viet Nam’s Robusta coffee supply between 2019-

2023

3.1 Quantity

“+ Cultivating coffee area in Viet Nam

- The coffee growing area in Vietnam is approximately 660,000 hectares (according to the most recent data in 2023, trend: increasing and

decreasing)

“* Quantity of the Robusta coffee

- The annual production of Robusta coffee has consistently decreased over the five-year period from 2019 to 2023, as illustrated in the following table:

Crop year Quantity (Million tons) 2018-2019 1,71 2019-2020 1,82 2020-2021 1,62 2021-2022 1,73 2022-2023 1,66

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(Source: The General Statistics Office)

The productivity of Robusta coffee has consistently decreased over the years, indicating a trend toward scarcity in the supply of Robusta coffee in Vietnam Several main factors contribute to this downward trend, including reducing coffee cultivation areas, weather conditions, and disease outbreaks

3.2 The manufacturers in the industry

“* Throughout the country, there are 97 coffee processing facilities for raw coffee beans, with a total designed capacity of 1.5 million tons per year; 160 coffee roasting and grinding facilities, with a total designed capacity of 51.7 thousand tons of products per year; and 11 coffee blending facilities, with a total designed capacity of 139.9 thousand tons of products per year (according to the latest data available in 2022)

“+ Advanced cultivation techniques:

The IoT (Internet of Things) and AI (Artificial Intelligence) technologies have been applied to intelligent fertilization for coffee plants, a

collaboration between the Agricultural Science and Technology Institute of the Central Highlands and Enfarm Agritech Company This tool collects data on soil nutrients, moisture, and pH levels, which are then transmitted

to farmers’ phones The benefits of applying this technology include cost reduction, reduction of fertilizer waste, and increased coffee bean productivity

“* Improvement of crop varieties:

Biotechnology and genetic engineering are researched and developed to create new coffee plant varieties with enhanced resistance to pests and diseases, high productivity, and suitability for diverse geographical conditions

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sự Potash fertilizer | Insecticide

Harvesting | Urea fertilizer | pp fertilizer cost (VND/ li

Period (VND/working | (VND/kilogram (VND/kilogram) cost (VND/kilogram | dependin ) the spec!