Coffee, rice and durian - three key agricultural commodities produced in Vietnam, have seen their prices climb sharply at the beginning of 2024 due to a combination of global supply and demand factors. According to analysis from Vietnam's Ministry of Agriculture and Rural Development, most commodities saw higher prices in January compared to November 2023 as demand increased while supply tightened in the context of El Nino weather conditions and geopolitical issues affecting international trade flows.

Of the three products, robusta coffee has seen the most dramatic price rises, repeatedly setting new record highs over the past 6 months. As of February 17th, the price of a kilogram of unprocessed coffee beans in Vietnam reached 80,100 VND, up 1,400 VND from the previous day. This marks an all-time peak for Vietnamese coffee prices. Speaking to Vietnamese news site VnExpress, the head of the Vietnam Coffee and Cacao Association attributed the surge to strong global demand pulling Vietnamese exports. International coffee importers are increasingly turning to Vietnam as a reliable supplier. In 2023, Vietnamese companies essentially cleaned out domestic coffee stockpiles to meet overseas orders - the first time in history that local shops ran out of coffee supplies by June. Current inventory levels have fallen sharply, underpinning further price gains.

Although not breaking records like coffee, rice export prices have maintained very high levels of around 640 USD per tonne - equal to last year's peaks. Vietnam is the third largest global rice producer and exporter, benefiting from tight global supplies and strong consumption in key Asian and African markets. The Director of Plant Protection Department under Dak Lak Province's Department of Agriculture and Rural Development, assessed that 2023 was a bumper year for many Vietnamese crops in terms of both yields and earnings. Looking ahead, rice prices are projected to remain supported internationally due to an imbalance of supply and demand.

Durian, known as the "King of Fruits" in Vietnam, has also witnessed around a 20% price jump from late 2023 levels at the beginning of this year according to traders and exporters. Top grade Monthong durians are currently selling at collection centers for 200,000 VND per kilogram, matching last year's peaks. Vietnam is a leading durian exporter, mainly catering to Chinese demand. Experts attribute higher durian values to rising Chinese appetite as well as protocols recently approved allowing Vietnamese frozen durian shipments into the country. Prices are forecast to continue increasing over the next few months as supplies dwindle from competitors like Thailand and Malaysia before the market potentially stabilizes mid-year.

Beyond strong fundamentals underpinning each crop, analysts point to several converging factors amplifying price pressures across Vietnamese agriculture. The lingering impact of the El Nino weather pattern along with ongoing issues in the Red Sea shipping lane have reduced fruit and vegetable output in other Asian and African growing regions. At the same time, surging global transportation costs are pushing commodity values higher worldwide.

CEO of major Vietnamese agribusiness Vina T&T Group Nguyen Dinh Tung concurred that prices for many produce items will keep rising in early 2024 before balance returns later in the year. Among key domestic exports, coffee, rice and durian are expected to achieve new milestones. Recent projections from Vietnam's Ministry of Agriculture and Rural Development estimate year-on-year growth in the entire farm sector of 3.2-4% for 2024, with the value of agricultural exports reaching 54-55 billion USD. Staples like coffee, rice and durian are earmarked for further breakthrough performances.

To capitalize on favorable market conditions, Vietnamese firms are ramping up production and trade. Vina T&T Group, the country's largest exporter of coffee, rice, pepper and durian, has increased durian orchards by 30% over the past year. Other major Vietnamese traders additionally report ambitious plans for expanding coffee, rice and fruit growing areas to lift output volumes. Both public and private bodies are optimistic that with continued high global prices, investment in agricultural development can generate significant income and jobs for rural communities across Vietnam in 2024. Whether prices hold or moderate later in the year, the strong start bodes well for another successful harvest season.