Robusta and Arabica coffee prices both increased, why?

At the end of the most recent trading session, the price of Robusta coffee in London for July 2024 delivery increased by 73 USD/ton, at 3,892 USD/ton, and for September 2024 delivery increased by 67 USD/ton, at 3,806 USD/ton.

Arabica coffee prices for July 2024 delivery increased by 2.6 cents/lb, to 218.25 cents/lb, and for September 2024 delivery increased by 2.55 cents/lb, to 217.35 cents/lb.

At the end of the week, Robusta coffee futures for July delivery increased by 374 USD. Arabica coffee futures for July delivery increased by 11.65 cents. Domestic coffee prices increased by an average of 11,000 VND/kg.

Domestic coffee prices increased following the world market, all higher by 1,500 VND/kg compared to the previous day, currently trading at 114,400 - 116,000 VND/kg.

Domestic coffee prices increased by 1,500 VND/kg this morning, May 26, 2024. Currently, the average purchase price in the Central Highlands provinces is 115,700 VND/kg, the highest purchase price in Dak Nong province is 116,000 VND/kg.

Specifically, the coffee purchase price in Gia Lai and Kon Tum provinces is at 115,000 VND/kg; In Dak Nong province, coffee is purchased at the highest price of 116,000 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 114,500 VND/kg.

Analyzing the market situation, coffee market expert Nguyen Quang Binh assessed that coffee last week had "strange" developments. Expectations that the Fed will soon cut interest rates and concerns about supply continued to be the reasons for coffee's recovery.

Domestic coffee prices increase by an average of 11,000 VND/kg

Another reason has emerged since mid-May 2024. Global trade barriers have come together, causing a shortage of empty containers, pushing ocean freight rates up by an average of about 30% in recent weeks and are expected to continue to rise.

Shipping lines are facing a severe shortage of empty containers due to prolonged congestion, cancelled sailings, etc. Many shipments are delayed due to the shortage of empty containers, leading to a large backlog. The new rate increase scheduled for June 1 will increase the shipping cost of each container by $1,000, which is expected to further boost coffee prices.

In the market, Mr. Nguyen Quang Binh commented that the business position is still favorable for the uptrend. Speculative groups have taken advantage of buying more, especially in the closing session of the week.

2024 will be the third consecutive year of increased production in Brazil. Data from the second survey of the 2024 coffee harvest by the National Supply Company of Brazil has revised the estimate of Brazil's 2024 coffee production to 58.8 million bags compared to the January forecast of 58.1 million bags.

Production will continue its recovery trend after falling from a record 63.1 million bags in 2020 to 50.9 million bags in 2021. In 2022, coffee production in Brazil will increase to 53.4 million bags and in 2023 will reach a total of 55.31 million bags.

According to the Brazilian Agricultural Statistics Agency, Brazil will harvest 42.11 million bags of Arabica coffee this year, with an average yield of 27.7 bags per hectare, up 5.9% from last year. Robusta coffee production will also increase by 3.3% to 16.71 million bags, due to favorable climatic conditions in Espírito Santo state, Brazil's largest Robusta coffee producer.

In the first four months of this year, Brazil exported 16.4 million bags of coffee, up 46.5% compared to the same period in 2023. Export turnover during this period is estimated at 3.4 billion USD.

The world's largest coffee producer has also benefited from rising international coffee prices as well as the recovery of the US dollar against the local currency, the real.

By 2024, Brazil's total coffee growing area will be 2.25 million hectares, up 0.5% from the previous crop. In April, Indonesia, the world's third largest Robusta exporter, also entered a new coffee crop.

In contrast to the upturn in Brazil, El Nino continues to haunt Indonesia's main coffee-producing regions, keeping Robusta output forecast to remain low in 2024.

With limited output and low supplies from previous crops, Indonesia’s coffee exports are unlikely to improve significantly in the near future. In 2023, the Southeast Asian country will only export about 2.5 million bags of beans, down about half compared to the same period last year.

Source: https://congthuong.vn/gia-ca-phe-robusta-va-arabica-dong-loat-tang-vi-sao-322381.html