Coffee prices may fall?

Coffee prices are forecast to decline on June 23, 2024 in the domestic market. The domestic coffee market has declined compared to the same time yesterday. Experts say the reason for the decline is the high USD.

According to some industry experts, in the coming time, coffee prices will likely fluctuate less strongly than in recent months, but will still maintain a high level. The reason is that Brazil is in the peak harvest season. Then, in October, it will be the harvest season in Vietnam.

In early June, Robusta coffee prices in the domestic market increased compared to the end of May. According to the Ministry of Agriculture and Rural Development, the amount of coffee remaining in the domestic market is very small. The coffee output of the upcoming crop is forecast to continue to decrease by about 20% due to the recent prolonged heat wave leading to severe drought in the Central Highlands.

At the end of the first 8 months of the 2023-2024 crop year (from October 2023 to May 2024), Vietnam exported nearly 1.2 million tons of coffee, equivalent to 80% of the current crop year's output and down 7% compared to the same period last crop year.

Currently, there are no specific figures, but it is certain that the output of the 2024/2025 crop will not be equal to the previous crop, so the Vietnamese coffee industry needs to prepare more defensive scenarios and better control risks in the new crop.

Vietnam's coffee output in the 2023/2024 crop year is estimated to decrease by 20% compared to the previous crop year, down to 1.47 million tons, the lowest in 4 years, according to the Ministry of Agriculture and Rural Development. The output in the 2024/2025 crop year is forecast to continue to decrease due to the widespread impact of the El Nino phenomenon in the previous crop year, pest and disease conditions in some areas, and the shrinking crop area as farmers switch to other crops with higher economic benefits.

Representatives of several large green coffee bean exporting enterprises in the Central Highlands region said that the amount of goods in stock is only enough to sell until June 2024, not until the new harvest.

Domestic coffee prices today are in the range of 122,000-123,200 VND/kg. Currently, the average purchase price in the Central Highlands provinces is 123,100 VND/kg, the highest purchase price in Dak Nong province is 123,200 VND/kg.

Specifically, the coffee purchase price in Gia Lai province (Chu Prong) is 123,000 VND/kg, in Pleiku and La Grai the price is 122,900 VND/kg; in Kon Tum province the price is 123,000 VND/kg; in Dak Nong province the coffee is purchased at the highest price of 123,200 VND/kg.

The price of green coffee beans (coffee beans, fresh coffee beans) in Lam Dong province in districts such as Bao Loc, Di Linh, Lam Ha, coffee is purchased at 122,000 VND/kg.

Coffee prices today (June 22) in Dak Lak province; in Cu M'gar district, coffee is purchased at about 123,000 VND/kg, and in Ea H'leo district, Buon Ho town, it is purchased at the same price of 122,900 VND/kg.

London Robusta coffee price (Photo: Screenshot giacaphe.com)

Specifically, the price of Robusta coffee futures contract for July 2024 delivery on the London floor was at 4,299 USD/ton, down 75 USD compared to the beginning of the trading session. The delivery term for September 2024 was 4,104 USD/ton, down 72 USD; the delivery term for November 2024 was 3,933 USD/ton, down 68 USD and the delivery term for January 2025 was 3,773 USD/ton, down 66 USD.

New York Arabica coffee price (Photo: Screenshot giacaphe.com)

Similarly, the price of Arabica coffee on the New York floor today at 20:30 on June 22, 2024 decreased in all terms, fluctuating at 219.50 - 225.00 cents/lb.

Specifically, the September 2024 delivery period is 225.00 cents/lb; down 5.35 cents/lb compared to the beginning of the session. The December 2024 delivery period is 223.25 cents/lb, down 5.30 cents/lb; the March 2024 delivery period is 221.65 cents/lb, down 5.35 cents/lb and the May 2025 delivery period is 219.50 cents/lb, down 5.50 cents/lb.

Brazilian Arabica coffee prices (Photo: Screenshot giacaphe.com)

The price of Brazilian Arabica coffee today at 20:30 on June 22, 2024 fluctuated in opposite directions. Specifically, the delivery period for July 2024 was 284.25 USD/ton, down 4.90%; the delivery period for September 2024 was 274.35 USD/ton (up 0.45%); the delivery period for December 2024 was 270.70 USD/ton (down 6.55%) and the delivery period for March 2025 was 269.05 USD/ton, down 7.10%.

Robusta coffee traded on the ICE Futures Europe (London exchange) opens at 16:00 and closes at 00:30 (next day), Vietnam time.

Arabica coffee on the ICE Futures US floor (New York floor) opens at 16:15 and closes at 01:30 (next day), Vietnam time.

For Arabica coffee traded on the B3 Brazil floor, it will be open from 19:00 – 02:35 (next day), Vietnam time.

It is known that due to the forecast that Robusta supply from Vietnam will continue to be scarce in the coming time, hedge funds have increased their net buying position.

According to updated data from trader Volcafe, due to unfavorable weather, Vietnam's Robusta coffee output in the 2024/2025 crop year is estimated at 24 million bags, at its lowest level in 13 years.

In addition, according to a report from the USDA Post (US Department of Agriculture's Foreign Affairs Office), Vietnam's coffee output in the 2024/2025 crop year is forecast to be around 29 million 60 kg bags, a slight decrease compared to the estimated 29.1 million bags in the 2023-2024 crop year. Of which, Robusta coffee output reached 27.85 million bags, lower than the previous crop year.

Currently, coffee farmers in Vietnam are applying intercropping methods to diversify and increase revenue instead of switching completely to other crops. USDA Post believes that the total coffee area in Vietnam will remain stable at about 600,000 hectares in the next few years. Coffee is still an important crop in highland provinces such as Lam Dong and Dak Lak, and rising coffee prices have helped stabilize coffee acreage.

For countries in the Southern Hemisphere, it is currently coffee harvest time, specifically from May to September every year. In Vietnam, located in the Northern Hemisphere, the harvest season ends from October of the previous year to the end of May of the following year.

World coffee industry experts believe that the price of this agricultural product will temporarily stop increasing and tend to decrease, due to the high harvest output in Brazil. However, some forecasts suggest that coffee prices will continue to increase in the fourth quarter of 2024, when Brazil finishes its harvest and Vietnam enters a new harvest.

Information for reference only. Prices may vary by location.

Source: https://congthuong.vn/du-bao-gia-ca-phe-ngay-2362024-gia-ca-phe-co-the-tut-doc-327585.html