Robusta coffee prices continue to rise, commodity exchanges are abandoned; Vietnamese coffee will still hold the top position for another 10 years

The USDX index reversed to a two-month high, pushing emerging currencies into a “depreciation” mode, reducing purchasing power due to the retreat of funds and speculation. The surge in long-term US Treasury yields attracted massive speculative capital flows and abandoned the commodity markets in general.

World coffee prices rose on the London robusta exchange, while those on the New York arabica exchange fell. Data reporting low inventories on both ICE exchanges and the weakening of the supporting USDX index caused both exchanges to rally strongly from the beginning of the session, but arabica coffee prices reversed and fell at the end of the session.

In the previous session, the Robusta coffee market also increased strongly, but could not maintain that increase, after the Eurozone economic outlook report was not as expected with the financial tightening of the European Central Bank (ECB) causing investors to be less interested in high-risk assets. Meanwhile, information about Brazil increasing Conilon coffee exports in early August also contributed to the slowing of the increase on the London floor.

Vietnam Customs reported that coffee exports in the first half of August reached 37,410 tons (about 623,500 bags), bringing coffee exports in the first 8.5 months of the year to a total of 1,154,214 tons, down 2.61% year-on-year.

Brazil's real rose sharply to a weekly high, discouraging coffee exports by farmers, helping to keep New York prices from falling further.

ICE – London inventory report data on August 22 showed that robusta coffee inventories decreased by another 40 tons compared to the beginning of the week, down to 36,110 tons (about 601,833 bags, 60 kg bags). Meanwhile, ICE – New York inventory report fell to an 8.5 month low.

Domestic coffee prices today, August 23, increased slightly by 100 VND/kg in key purchasing localities. (Source: Kitco)

At the end of the trading session on August 22 on the international futures exchange, the price of robusta coffee on the ICE Futures Europe London exchange for September 2023 delivery increased by 15 USD, trading at 2,573 USD/ton. The August delivery period increased by 13 USD, trading at 2,374 USD/ton. The average trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange for September 2023 delivery decreased slightly by 0.75 cents, trading at 150.05 cents/lb. Meanwhile, the December 2023 delivery decreased by 0.85 cents, trading at 151.55 cents/lb. Trading volume was high on average.

Domestic coffee prices today, August 23, increased slightly by 100 VND/kg in key purchasing localities.

Average price	Change
USD/VND exchange rate	23,700	+ 70
DAK LAK	64,500	+ 100
LAM DONG	63,800	+ 100
GIA LAI	63,900	+ 100
DAK NONG	64,700	+ 100

Unit: VND/kg.

(Source: Giacaphe.com)

Currently, domestic and international coffee prices, especially robusta coffee prices, are increasing. The world's coffee supply is shrinking and the shift in consumption trends to robusta instead of arabica is expanding the growth prospects for demand and export turnover of Vietnamese robusta coffee globally.

According to the Vietnam Commodity Exchange, Vietnam will continue to be the world's largest coffee producer and exporter during the period 2023 - 2033.

Looking back at the progress of the past 10 years (2012-2022), according to statistics from the Vietnam Coffee - Cocoa Association (VICOFA), coffee output in 2022 reached 1.84 million tons, an increase of nearly 21% compared to 10 years ago.

Coffee production productivity in 2022 reached its highest level at 28.2 quintals/ha. Notably, Vietnam's coffee export value increased sharply, from more than 3 billion USD in 2012 to 4.06 billion USD in 2022, an increase of more than 35% after 10 years and expected to continue in 2023.

Notably, in more than 100 countries and territories importing Vietnamese coffee, strong growth was recorded in countries that are world coffee powers such as Italy, Germany, France, the US, etc.

Not only increasing export value, domestic coffee consumption in Vietnam also grew positively, from 0.5kg/person in 2012, it increased 4 times to over 2kg/person in 2022, accounting for >13% of the country's total coffee output.

Domestic coffee prices increased from about VND 38,000/kg in 2012 to VND 43,500/kg in 2022. Notably, after many price increases since the beginning of 2023, domestic coffee prices are now at VND 65,000 - 66,000/kg, an increase of 49% compared to 2022.

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