Vietnam’s coffee output this crop year is expected to reach around 1.6 million tonnes. Domestic coffee consumption is forecast to reach 270,000-300,000 tonnes. The increase in domestic demand combined with low production output could significantly affect the supply of raw materials for export, however, exports will still be favorable, according to Vicofa.
Coffee price today 12/19/2024
Global coffee prices fluctuated, with robusta falling for the second consecutive day while arabica quickly recovered strongly. Robusta coffee prices are under pressure as ICE-monitored inventories rose to a four-week high of 3,912 lots.
Domestic coffee prices today, December 19, fluctuated between 122,000 - 123,500 VND/kg. Vietnam's coffee harvest is taking place slower than the same period last year. Partly due to the wet weather that lasted from late November to early December. However, the weather is forecast to improve in the coming days, favorable for accelerating the harvest.
On December 18, after a two-day policy meeting, US Federal Reserve policymakers voted 11-1 to approve a 25 basis point interest rate cut. This is the third consecutive rate cut by the Fed since September 2024, bringing the base policy rate to a range of 4.25% - 4.50%, but Fed policymakers now predict they will only make two 25 basis point rate cuts by the end of 2025.
According to experts, the Fed's move was calculated by traders and speculators. Therefore, coffee prices did not fluctuate much. Robusta coffee prices fell due to a sharp increase in inventories on the floor, while Arabica recovered because Brazil's domestic currency was losing value against the USD.
"Significant differences in estimates for Brazil's 2025-26 crop are raising concerns about Brazil's coffee supply in 2025 and increasing volatility," Rabobank said in a report. Brazil's Somar Meteorologia said rainfall in Minas Gerais state, Brazil's largest arabica coffee growing region, was just 35.2 mm last week, or 65% of the historical average.
However, the upside has been limited by the weakening of the real. The Brazilian real has lost 3.41% of its value against the dollar since the beginning of December, which may encourage some selling in the domestic market. A weaker real makes it more profitable for producers to sell in dollars.
Meanwhile, according to the Vietnam Coffee and Cocoa Association (Vicofa), Vietnam's coffee exports still have many advantages thanks to increased supply due to the new 2024/25 harvest and high export prices. It is forecasted that the entire year's coffee export turnover will set a record at 5.5 billion USD. Regarding the expected output from this crop, current forecasts fluctuate quite a lot, from 26 to 30 million bags. It is possible that these forecasts will be adjusted as the harvest continues to progress into the new year.
In terms of consumption markets, the anticipated political change in the United States – the world’s largest consumer – by 2025 has created some uncertainty in international markets. Changes in policies and trade relations with producing countries, including Central and South America, are largely centered around agricultural and textile products. While it is difficult to predict how coffee flows will be directly affected, these economies are, to varying degrees, more dependent on favorable trade conditions with the United States than vice versa.
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| Domestic coffee prices on December 18 decreased by 500 - 1,000 VND/kg in some key purchasing localities. (Source: YouTube) |
According to World & Vietnam , at the end of the trading session on December 18, the price of robusta coffee on the ICE Futures Europe London exchange turned down, the delivery term for January 2025 decreased by 65 USD, trading at 5,151 USD/ton. The delivery term for March 2025 decreased by 29 USD, trading at 5,139 USD/ton. Trading volume was low.
Arabica coffee prices on the ICE Futures US New York exchange turned sharply up, with the March 2025 delivery term up 7.70 cents, trading at 332.65 cents/lb. Meanwhile, the May 2025 delivery term up 5.50 cents, trading at 327.40 cents/lb. Average trading volume is high.
Domestic coffee prices on December 18 decreased by 500 - 1,000 VND/kg in some key purchasing localities. Unit: VND/kg
(Source: giacaphe.com) |
In November, world coffee prices continued to increase and set a new record due to investors increasing purchases and concerns about delayed supply from Vietnam, along with forecasts of reduced output in Brazil, which were the driving forces for strong coffee growth.
In November, market attention was focused on the outlook for Brazil’s arabica coffee production, which has fueled the month’s meteoric rise in coffee prices. According to a report by Volcafe Ltd., Brazil is forecast to produce just 34.4 million bags of arabica coffee in the upcoming season, down about 11 million bags from September’s estimate. This puts global coffee production at risk of falling short of demand, leading to a deficit of 8.5 million bags in the 2025-26 crop year.
According to the International Coffee Organization (ICO), global coffee exports reached more than 11.1 million bags in October - the first month of the 2024-2025 crop year, up 15.1% compared to nearly 9.7 million bags in the same period last year.
Global coffee prices continued to rise in November, setting new records as investors increased purchases and concerns about supply delays from Vietnam, along with forecasts of lower production in Brazil, were the driving forces behind the sharp increase in coffee prices. Coffee prices also rose as Brazilian farmers held back their goods in the hope of further price increases, while high freight rates and a shortage of containers slowed the flow of goods from the world's largest producer.
A sharp rise in coffee futures prices, which has increased financing costs for the industry, has forced two major exporters in Brazil (the world's top coffee supplier) to request debt renegotiation.
In Vietnam, unfavorable weather has affected key coffee-harvesting regions, raising concerns about supply disruptions. At the same time, slow exports from Vietnam have tightened the global coffee market. Vicofa forecasts that coffee output in the 2024-2025 crop year could fall by 5% to around 1.6 million tonnes. If this happens, this would be the second consecutive crop year in which Vietnam has recorded a decline in coffee output.
According to data from the General Department of Customs, Vietnam's coffee exports in November reached 63,019 tons, worth 351.7 million USD, down sharply by 47% in volume and 1.3% in value compared to the same period last year. This is also the lowest export volume in November since before 2009, although Vietnam is in the harvest season.
In November, although Vietnam is in the harvest season, the price of robusta coffee in the domestic market still increased sharply following the increase in world coffee prices. Coffee prices on November 28, 2024 increased from 18,900 - 19,100 VND/kg compared to October 28, 2024, ranging from 127,500 - nearly 130,000 VND/kg (depending on the surveyed area).
Source: https://baoquocte.vn/gia-ca-phe-hom-nay-19122024-gia-ca-phe-robusta-dang-chiu-ap-luc-fed-giam-them-lai-suat-thi-truong-tiep-tuc-chinh-phuc-ky-luc-moi-297827.html
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