Preparing for the new crop, coffee exports expected to increase again

According to the Vietnam Commodity Exchange (MXV), at the end of the trading day on October 4, in the coffee market, Arabica prices continued to decrease by 1.61%. At the same time, Robusta prices were also 1% lower than the reference price, pushing prices to the lowest level in more than 1 month. MXV said that positive supply from Brazil continued to be the main factor putting pressure on prices.

Coffee prices fell slightly on October 4

According to information from the Brazilian Government, the world's largest coffee supplier exported 177,685 tons of green coffee (2.69 million 60kg bags), up 10.5% compared to 169,678 tons in the same period in 2022.

At the same time, more rainfall and frequency in Brazil's main producing regions will help provide moisture and reduce heat for better flowering of coffee trees, which will help limit negative concerns about coffee production in the 2024/25 crop year.

In addition, coffee inventories on the Intercontinental Exchange (ICE) are showing positive signs, which also partly increases the pressure on prices. Standard Arabica inventories on the ICE-US Exchange at the end of the session on October 3 increased by 2,926 60kg bags, reaching 444,871 bags. Meanwhile, Robusta coffee on the ICE-EU Exchange is also at 42,380 tons, a significant increase compared to the lowest level in August, just under 34,000 tons.

In the domestic market, similar to the world price trend, this morning, the price of green coffee beans in the Central Highlands and the Southern provinces continued to be adjusted down for the fourth consecutive day, with a decrease of about 400 - 600 VND/kg. After the adjustment, the domestic coffee price is currently purchased at around 65,400 - 65,000 VND/kg.

The new crop year of the coffee industry will start in the fourth quarter of 2023 and early in the first quarter of 2024.

According to the latest data from the General Statistics Office, Vietnam's coffee exports in September decreased sharply, reaching 65,000 tons, down 23.2% compared to August and down 32.7% compared to the same period in 2022. Export turnover reached 205 million USD, down 20.8% compared to August and down 12.8% compared to the same period last year.

In the first 9 months of 2023, Vietnam's coffee exports reached 1.27 million tons, down 7.3% over the same period last year; turnover reached 3.16 billion USD, up 1.9%.

However, according to the Import-Export Department - Ministry of Industry and Trade, in the first 9 months of 2023, the average export price of Vietnam's coffee remained high, estimated at 2,499 USD/ton, up 9.9% over the same period in 2022. This is the highest price in many years.

Coffee exports are expected to increase again from November when Vietnam enters the 2023-2024 coffee harvest (taking place in the fourth quarter of 2023 and early first quarter of 2024). Meanwhile, domestic coffee prices may also decrease. However, coffee prices have now established a new level due to the increase in input costs such as electricity, fertilizers, pesticides, etc. In the short term, domestic coffee prices are forecast to remain above VND64,000/kg.

Over the past three decades (since the 1986 reforms), coffee has been one of the most important contributors to Vietnam's agricultural sector's revenue in particular and to the country's overall GDP in general.

The coffee industry has created more than half a million direct and indirect jobs and is the main livelihood of thousands of households in agricultural production areas. Coffee export value usually accounts for about 15% of total agricultural export turnover and the proportion of coffee has always exceeded 10% of agricultural GDP in recent years. Coffee is also the main export item in the agricultural product group.

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