Not cooling down, coffee export prices increased for 4 consecutive sessions

According to statistics from the Vietnam Commodity Exchange (MXV), at the end of the trading session on January 9, the prices of the two coffee products returned to the same trend. Of which, Robusta prices increased by 1.63%, the fourth consecutive session of increase, Arabica prices recovered by 1.49% after hitting a one-month low. The intra-session price movements of Arabica were quite volatile due to the mixed influence of basic information.

On the one hand, prices are supported by a more positive outlook for coffee demand in the US in particular and the market in general. Americans are gradually gaining confidence that inflation will cool down, and Federal Reserve officials have also signaled support for the agency to cut interest rates in 2024. Lower inflation and interest rates will boost consumer spending and increase demand for non-essential goods such as coffee.

Prices of two types of coffee increased

On the other hand, the market is under pressure from positive supply signals with positive export figures from Brazil. According to the Brazilian Government , this South American country exported 4.06 million 60kg bags of coffee beans (equivalent to 243,560 tons) in December. This is the highest monthly coffee export volume in the last 3 years, up 33.75% and 3.77% compared to the same period in 2022 and November 2023, respectively.

The Robusta market continues to be concerned about the limited sales of coffee by farmers in Vietnam and other Southeast Asian countries. Tomorrow, the General Department of Customs will announce coffee export figures for December and the whole of 2023.

According to observers, the increase in Robusta coffee prices in London is due to Vietnamese farmers expecting higher prices and still holding on to their goods even though the Robusta coffee harvest is in its final stages. Meanwhile, the blockage of the international shipping route between Europe and Asia could cause shipping costs to skyrocket due to having to go around the Cape of Good Hope in South Africa, and the reluctance of Vietnamese farmers to sell their goods at low prices after three previous declines has led to speculation on the London exchange pushing spot prices to record highs.

The National Coffee Federation (FNC) in Colombia reported that coffee production in December 2023 increased by 23.55% compared to the same period last year, equivalent to an increase of 239,000 bags to 1,220,000 bags.

Coffee export prices will remain high in 2024

Mr. Do Ha Nam - Chairman of the Board of Directors of Intimex Group - said that a characteristic of the coffee industry is that the purchase and sale are done first, then the delivery is made. This happens not only in key coffee growing areas but also on the futures exchange in London.

While many people can rely on the price rules of this commodity from previous years to assume that every year, the price of coffee will decrease, even decrease sharply every time the harvest season comes. And this year, the price of coffee will be the same, so many agents and small businesses in the localities have signed contracts in the form of pre-sale at high prices. Then, when the harvest season comes, they will buy at a cheaper price with the hope of earning a large difference.

But the high price of coffee even when the harvest is in full swing, and even when the harvest is gradually coming to an end, has caused many buyers and agents to fall into losses.

According to the Vietnam Coffee and Cocoa Association (Vicofa), domestic coffee prices are expected to remain high in 2024 due to a severe shortage in supply in the 2022/2023 coffee crop. The association estimates that there is a shortage of about 1.5 - 2.5 million bags of coffee under contract and needs to be met from the current coffee harvest, while farmers are still reluctant to sell coffee at current prices, pushing prices further up on the London exchange.

According to statistics from Vicofa, Europe currently consumes about 40-50% of Vietnam's coffee exports and this region still has good demand. Therefore, with the current large shortage of supply, coffee prices are forecast to continue to be high in 2024.

The International Coffee Organization said rising tensions in the Red Sea have forced some shipping lines to reroute their coffee shipments. As a result, for Southeast Asian and East African coffee bound for Europe, unforeseen impacts include increased shipping costs as some shipping companies have introduced surcharges to compensate for the extended transit times.

According to estimates from the Ministry of Industry and Trade , Vietnam's coffee exports in 2023 will reach about 1.61 million tons, worth 4.18 billion USD, down 9.6% in volume, but up 3.1% in value compared to 2022.

Source link: https://congthuong.vn/chua-ha-nhiet-gia-ca-phe-xuat-khau-tang-4-phien-lien-tiep-297026.html