Dak Lak, the coffee capital of Vietnam, produces the largest share of coffee in the country, accounting for about 40% of the national coffee output. Coffee is the primary agricultural product in the province, playing a major role in the local economy and contributing significantly to annual export turnover. It also directly impacts the livelihoods of most of the province’s population.
As the province enters the 2024-2025 coffee harvest, farmers are feeling optimistic due to a sharp increase in coffee prices. However, the coffee industry in Dak Lak faces numerous challenges, from climate change to rising prices, which have led local authorities to focus on sustainable development solutions for the sector.
According to the Department of Agriculture and Rural Development of Dak Lak, the coffee prices in the 2023-2024 harvest surged, reaching 128,000 VND per kg of green coffee by November 28, 2023. This price boost has provided a much-needed income source for farmers. However, the price increase has also disrupted the supply chain linking coffee-producing regions, as well as exacerbated global supply chain issues. Military conflicts worldwide and ongoing global inflation have further complicated the situation, leading to higher prices and challenges for the coffee market.
Adding to the difficulties, EU regulations now prohibit the import of coffee linked to deforestation and have tightened pesticide residue rules. These changes have led to stricter export controls, limiting coffee shipments to European countries.
Despite the higher prices, Dak Lak’s coffee industry still faces many challenges, including bad harvests, climate change, droughts, and pests, which have led to reduced coffee production in the region. Farmers are experiencing a “bad harvest, good price” situation, where the quantity of coffee is down, but prices are rising.
To address these issues and improve the quality and yield of local coffee, Dak Lak has been implementing a range of sustainability solutions. Notably, the province launched the 2021-2025 Coffee Replanting Program, which covers an area of 24,441.78 hectares, with plans to replant around 4,800 hectares per year. By 2024, the province is set to have replanted 15,467.4 hectares, or about 63.3% of the target. In 2024 alone, approximately 4,712.3 hectares of coffee will be replanted, achieving 94.34% of the annual goal.
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