This interview with Ngoc (Lily) Nguyen, the Vietnam Southern Region Sales Manager at HAP Commodities Consulting, covers how the Iran–Hormuz conflict is affecting the coffee sector in Vietnam, current price trends, and global supply expectations
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BARNES: I just want to make sure first. Is it okay for me to record?
NGUYEN: Yeah. Yeah. But you just write down the article now, right? Not post our video? Not post, right? You don’t post it?
BARNES: Usually I share the video on my YouTube.
NGUYEN: Okay. Can I — do I have to change my clothes or — ?
BARNES: No, look, I write the article. This is for a written article.
NGUYEN: But I like to post the videos as well so that people can check my work.
BARNES: Okay.
NGUYEN: So I’m okay.
BARNES: Like, if you want to dispute anything that I’ve said that you said, you can go and look at it and say, you know what I mean? So not many people view it, if anyone does. But I do like to have it there, so you know.
NGUYEN: Okay. Okay. So is it okay I wear casual?
BARNES: It’s totally fine.
NGUYEN: Okay. Okay. Thank you.
Not a worry.
BARNES: So firstly, can you just tell me a bit about what Hap Hap Consulting does?
NGUYEN: Yes. Okay. Okay. Let me introduce myself first. Okay.
BARNES: Sure.
NGUYEN: Hello everyone. Hello Mark. My name is Lily.
Now I work for HAP Commodity Consulting as director of the south, and I’m in charge of development for the agriculture sector, like the food ingredient corn with soy meal and some soft commodities like sugar and coffee bean. And HAP Commodity Consulting is a process and a consulting firm.
We, in Vietnam now, we also do some process like for the retail and and the investor retail investor can join the international commodity market like CME (Chicago Mercantile Exchange) CBOT (Chicago Board of Trade) ICE (Intercontinental Commodities Exchange), because when you want to invest in some foreign overseas market you have to get license from the government, and we get a get a license, so we can allow our customer to put the money and invest our overseas in overseas.
BARNES: So you focus on outbound investment, Vietnamese people looking at investing outside of Vietnam. Correct?
NGUYEN: Correct. Correct. But only for the commodity. Only for commodity.
Because you know Vietnam government they quite restrict for the outflow from Vietnam, the outflow of money from Vietnam.
So we have the license, and clarify it is not laundering money, or it just for — and hedging as well, because you know Vietnam, we import a lot.
We are top five and top three for the corn and soybean meal for our feed industry, and for the soybean we also export, the top two right, the top two for the overall coffee and top one for Robusta.
That’s why for us the hedging on the commodities, on the futures, is very, very important.
BARNES: Sure. Okay. Cool. And so moving more into specifically coffee then, so I guess the conflict in Iran started a month ago. What sort of changes have you seen in the market because of that?
NGUYEN: Yes. As we all know, the war already started one month ago. Yeah.
And for the impact on the coffee, the local coffee so far it not have any effected any — not so clear, not so clear.
We so far we just got effect mostly from the price on the ICE, the exchange from the commodity exchange, like the ICE US and ICE Europe. Yeah.
But basically it also affects the logistics, mostly I think the logistics fee, both local and overseas. Because you know Vietnam will export over 60% 70% of our production to Europe, to US and China, the Asian market like China, Indonesia, and sometimes Brazil as well.
Yes, mostly the US and Europe are still our biggest clients, and when the war started, it affected our logistics fees because crude oil goes up, it nearly double, right, the price double.
And although the coffee, the flow coffee from Vietnam or Asia to Europe mostly just goes through the Suez and the Red Sea.
So actually just take a longer, just a longer, a little bit. Yes. Longer a little bit, and the logistics fees are so high.
That’s why it refers to our input cost. Yes.
BARNES: So who pays that cost? Do you pay as the commodity trader, or does the farmer cover the logistics cost, or is it the buyer?
NGUYEN: Yeah, only for the trader, not the farmer.
The farmer has already sold their crop already.
Just for the trader, trading companies, some exporters in Vietnam, like Simexco or Fimex or something like this.
They wouldn’t pay the fee because you know when you want to sell something stable, you have to have a contract, right, the volume contract first, and later you will hand by hand delivery, month by month.
That’s why for us, and because of the price of the crude oil, it goes up immediately, suddenly, we couldn’t like focus that price into our input price.
We have to bear that price, not the consumer side. That’s why we affect from that.
Yeah. And you know now because Europe, the demand from Europe is quite weak.
So for us, we have to find a way to boost more sales.
That’s why we accept that cost in the short term.
But in the long term, if the price of oil keeps higher, we need to discuss again about the firm logistic fee.
BARNES: Sure. You say EU demand is low. Is that all of the time or just right now?
NGUYEN: Recently, just in the last two years.
BARNES: In the last two years. Why do you think that is?
NGUYEN: Because we are also looking forward to selling in other markets like China, in Korea and in Japan, not so focused on the European market.
BARNES: Yeah. Okay. Okay. Right. And I guess coffee prices right now they’re they’re quite low, and I I understand this is not necessarily connected to what’s happening in Iran. I’ve heard that it’s because Brazil is expected to have a really good crop.
NGUYEN: Correct. Correct.
BARNES: Is that — And so I guess how are sort of the farmers responding to these low prices?
NGUYEN: Correct.
Actually, we also work with a lot of farmer in the in the central highland, and most of them they still expect a high price, because mostly I just work with them with the in Vietnam dong, the price in quoted in Vietnam dong.
Is it okay for me to tell the price in Vietnam dong? Right?
And you know, last year, the historic price of a local coffee is 135,000 Vietnam dong per kilogram.
And now, and at that moment, a lot of people expect more than that.
They say it must be 150, 170.
That’s why when we start a new crop for 2026 and 27, the stock in the farmer is still quite high, because they keep the hope that they can sell.
Yes, they stuck with that, that is their hope, their expectation.
And now the market dropped significantly to 135, and the lowest until now is a 70ish, but the market bounce up, and now the the trading the market acceptable about the price of 85 to 90.
But they still, because some local trader and the farmer also stuck with the price, a range from 100 100 Vietnam dong 100,000 Vietnam dong.
That’s why they expect the price can go higher a little bit, maybe near the 100,000 Vietnam dong, so they can sell their the stock, the inventory and take the money back.
Because the buyer, the buyer from the overseas they expect the lower price, but the farmer they expect the high price.
They can’t match, they can’t match, and even the middle man stand in the middle, they also can’t do anything, because the farmer doesn’t want to, they don’t want to to sell, and the sell, the buyer, they have a lot of option to buy at that moment.
Indonesia is harvesting now, and the next two months they will have Brazil and Colombia — everywhere.
That’s why in Vietnam there is quite a conflict between the farmer’s interest and the local trader.
And so far I think maybe, maybe now sooner or later they have to sell the price the crop the inventory to take the money back and be well prepared for the next crop.
BARNES: Sure. Yeah. Yeah.
NGUYEN: So I think maybe still have a lower price than now in the short term.
BARNES: So you think it’ll go lower? Down?
NGUYEN: I think it’s still lower.
BARNES: Interesting. I wonder do you, as a trader, have any sort of ideas about how you would go about fixing this problem where the farmers are holding on to their coffee for too long.
NGUYEN: Actually, we don’t do that because it’s their choice. It’s their choice.
So for us it’s yeah, it’s based on the volatility and what happened on because now all of the coffee around the world take the coffee on the ICE US and ICE Europe as a reference, right?
And that’s why we couldn’t do anything, we just follow the market, and I think at some point, some farmer they would give up, and they sell, because they keep, because coffee also has a date right if if you keep it too long in the inventory, so it wouldn’t get broken.
BARNES: I was just going to say so, like when you’re talking to these farmers, what are they sort of saying to you? Like, where are their heads? What are they thinking?
NGUYEN: Thinking about the lower price or —
BARNES: No, I mean about having these stocks — like you’re out there and you’re a trader and you’re saying this is the price you’re going to get or this is where it is and it’s probably going to go lower. I mean how what do they say? How do they respond?
NGUYEN: Let’s say okay let’s just wait, just wait, because you know the last two years they take quite a profitable, they have enough finance. Yeah.
Now finance now. So they okay to wait.
But I think in the next three months Vietnam is about to have a new crop three or four month next four month, but now we focus more on the Brazil crop, that’s why we also get the pressure from that.
And I think yeah, so far we still maybe the price is still lower, and then maybe they still keep the inventory in their stock.
BARNES: Yeah. Okay. Cool. And so I just wanted to return to the Iran conflict again. I want to ask about fertiliser.
NGUYEN: Correct.
BARNES: Are you seeing that having a big impact and increase in cost there?
NGUYEN: A big, really a big, a huge impact. Yes.
Because you know Vietnam is had the biggest yield for coffee Robusta in Asia.
We have, you know, we have nearly double the yield compared to the Indonesia farmer because we use a lot — thanks to the — we have the upgrade the technical for the plant, like match a lot of kinds of plant, that’s why it had a better yield, and as we also use a lot of fertiliser.
And now we just — Vietnam crop just passed the flowering, and now is focus more on how to put the yield, and they will use a lot of fertiliser.
And now I think the fertiliser is the key point, the key problem to the farmer.
Because this year we see the Hormuz accounts for 30% of the fertiliser from over the world, and now even the China, last week, they also informed that they stop to export the first four the first four fertilisers.
And overall the fertilizer now is quite tight to the world, not only to the Vietnam market.
That’s why I think the higher — the high fertiliser of this crop will also effect to the cost of the crop of planting the bean, the coffee bean, I think.
BARNES: Sure. Yes, sure. I mean, it’s interesting because you’ve got an increasing input cost at the same time you’ve got very low prices. Imagine this is a very big strain on a lot of farmers.
NGUYEN: I know sometimes — sorry, but you know 30 years ago, 30 years ago, Vietnam price the local Vietnam coffee bean only 30,000 Vietnam dong. 30,000 Vietnam dong. Yeah.
BARNES: Sure.
NGUYEN: So now in 90 is still triple.
So somehow if even the market go a half like 45 or 60 something like this, they somehow, they still have just a thin margin.
And in the last three years, there’s a switch crop between the coffee bean and the durian. Have you heard that?
BARNES: I have heard about this. Yeah. Go on.
NGUYEN: Yes. That’s why now, and because the coffee bean now, recently, in last two years, the price goes up again, right, it attracts a lot of farmers to go back to the market.
And now that’s why they couldn’t get out of the market immediately, they keep working with the current one.
BARNES: Sure.
NGUYEN: Until I think so far, it not affect to the supply anymore, or the coffee, as all the decisions apply, I will not plant the coffee more in the next year or something like this.
The coffee is a long, long plant. You don’t have to replant it every year. It’s just a plant, fertiliser, and some water, and you harvest again.
And that’s why for me, although the input cost higher and the coffee bean lower, they still have to do the work.
BARNES: They still have to stay with coffee —
NGUYEN: At least two or three years the next. Yes. Yeah. Right.
BARNES: Interesting, because that was my next question, was if you thought the crops would end up being smaller moving forward, but it sounds like you’re saying that’s not really an option.
NGUYEN: Correct. Because now durian, rice also dropped.
BARNES: Yeah. Okay.
NGUYEN: But somehow the coffee is still better than durian, right?
BARNES: Why is that?
NGUYEN: Sorry.
BARNES: Why is that? Why is the coffee better than the durian?
NGUYEN: Because we got a lot of competition from Thailand, from China, and China now China is the biggest consumer, biggest client in Vietnam, and now China they also have their own durian, that’s why also effect to the Vietnam market.
BARNES: Okay. Cool. All right. Fantastic. That’s basically all of my questions. Did you have anything you wanted to add? Anything you think I’ve missed? Any other important factors?
NGUYEN: But I just want to know, so what is the name of your article, like what what you want about, like you want to share with your audience about how the war in Iran affects the coffee in Vietnam.
I think yeah basically, yeah, it’s going to be how the coffee industry is being impacted by the yes conflict in Hormuz.
I think overall your question already covered.
So yeah, I think good.
Yeah.
BARNES: All right.
NGUYEN: If you finish your article, can you share to me, and I can share to my customer as well.
BARNES: Yeah, of course. I’d be more than happy to. Yeah, I think it will be in the next couple of days. You’re my last interview, so yeah, now I just need to sit down and write it.
Nice to meet you.
NGUYEN: So if you have any plans to go to Vietnam, contact me and we can grab a coffee and update.
BARNES: For sure. Next time I’m in Ho Chi Minh City, I will I’ll get in contact.
NGUYEN: Okay. Good. Good.
BARNES: All right. Fantastic. Thank you so much.
NGUYEN: Okay. BARNES: No problem. You’re welcome. Bye.
BARNES: Bye.