World coffee prices returned to an upward trend, with Arabica reaching a five-week high and Robusta surpassing $2,500 as the consumer market continues to maintain concerns about supply shortages. Coffee inventories on both the London and New York exchanges continued to decline but no additions were recorded. Robusta inventories even remained at their lowest level since 2016.
Supply is still a major concern during this time as there are rumors that Brazilian farmers are not selling coffee due to the strengthening of the local currency (Real), which makes them earn less money when exporting agricultural products in general, including coffee. They are even more reluctant to sell at low prices, because of the possibility of losses due to increasing investment costs. The yield of two consecutive coffee seasons is not as expected, which also makes Brazilian farmers almost unprofitable.
Vietnam's July export data estimates robusta coffee exports this month at only 80,000 tonnes (about 1.33 million bags), down 32.1% year-on-year.
Indonesia's government trade agency reported robusta coffee exports in June reached 247,635 bags, up 12.5% year-on-year.
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| Domestic coffee prices today, August 3, increased by 500 - 600 VND/kg in some key purchasing localities. (Source: Lecafebmt) |
At the end of the trading session on August 2, the price of robusta coffee on the ICE Futures Europe London exchange increased. The price of robusta coffee futures for September 2023 delivery increased by 39 USD, trading at 2,674 USD/ton. The price of November delivery increased by 38 USD, trading at 2,532 USD/ton. Average trading volume.
Arabica coffee prices on the ICE Futures US New York exchange continued to increase, with the September 2023 delivery term up 2.4 cents, trading at 166.95 cents/lb. Meanwhile, the December 2023 delivery term increased 1.95 cents, trading at 166.35 cents/lb. Trading volume was high.
Domestic coffee prices today, August 3, increased by 500 - 600 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
ICE inventory reports on both exchanges continue to decline but there has been no significant addition, especially ICE – New York has not had any coffee bags registered for auction for nearly a month and ICE – London has been gradually decreasing to its lowest level since 2016.
As of August 2, the amount of Arabica coffee stored at ICE – New York remained unchanged at 31,725 tons (equivalent to 528,752) bags. Robusta coffee stored at ICE – London decreased by 520 tons, down to 51,310 tons (equivalent to 855,167 bags).
Preliminary statistics from the Brazilian Coffee Exporters Association (CECAFE) show that coffee exports in Brazil in July were somewhat positive. Specifically, Brazil shipped 2.68 million 60kg bags of coffee, up from 2.59 million bags the previous month and 2.52 million bags in the same period in 2022.
On the other hand, concerns about supply shortages in Asia continue to support robusta prices. Supply in Vietnam is running out, leading to a 6% year-on-year decline in exports in the first seven months of 2023, according to estimates from the General Statistics Office of Vietnam (GSO). Threatened supply and rising global demand for coffee will help robusta prices maintain their upward momentum until the end of the year.
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