Robusta coffee export price suddenly drops sharply

According to the Vietnam Commodity Exchange (MXV), on October 2, the prices of two coffee products simultaneously decreased sharply during the trading session. Of which, the price of Arabica coffee lost nearly 3% compared to the reference price, reaching 5,654 USD/ton, the lowest in the past two weeks; the price of Robusta coffee decreased sharply by more than 6%, reaching nearly 5,100 USD/ton. A series of basic information favorable to the crop as well as the coffee supply has put pressure on prices.

Robusta coffee prices suddenly dropped sharply by 6% to nearly 5,100 USD/ton.

The LESG weather forecasting agency said that the drought in the Southeast region - Brazil's main coffee growing region - may end this week. Starting next week, a cold air mass from the South will gradually move to the Southeast region, bringing rain and causing the average temperature to drop. It is expected that in the next 15 days, the rainfall in the Southeast may be 50 mm higher than normal and the temperature will drop by 2-4 degrees Celsius. The improved weather conditions have raised hopes that the coffee crop in Brazil may recover after a series of record-breaking dry days.

In addition, the European Commission is proposing to delay the implementation of the new regulation on the import of goods by 12 months. Previously, the EU issued the EU Deforestation Prevention Regulation (EUDR). This regulation prohibits the import of 7 groups of goods, including: coffee, palm oil, wood, rubber, beef, cocoa and beans into the EU if the production of these goods causes deforestation.

This move could help stabilize the coffee trade in the coming period as some coffee producers are still trying to meet the requirements. Moreover, the late implementation of the EUDR regulation could also encourage European coffee importers to temporarily stop their massive imports (to ensure sufficient supply before they are unable to import coffee due to the new regulation), thereby helping to bring the coffee supply and demand in the market back into balance.

More positive coffee production and export prospects from some of the world's top coffee producing countries also added pressure to coffee prices yesterday.

Honduras, Central America’s largest coffee grower, said it expects to export around 5.37 million bags, up 14.5% from the previous season thanks to increased production this year. Earlier, the Indonesian government announced that its coffee exports in August exceeded 19,000 tons, up 18% from the same month last year.

Colombia, the world's largest exporter of high-quality Arabica coffee, also estimates production at around 13 million bags in 2024-25, while total exports are around 12 million bags, up 14.3% from the previous season.

In Lam Dong and Dak Lak, coffee has begun to ripen early. Every year, when the harvest begins, coffee prices are expected to fall due to increased supply. However, this year, drought has reduced the size of coffee cherries, leading to an expected 10% to 15% reduction in production.

Therefore, high coffee prices help growers earn better income than last year. It is expected that from the end of October 2024, when Vietnam enters the harvest season, coffee output will increase and exports could reach 6 billion USD.

According to the General Department of Customs, from the beginning of the year to September 15, Vietnam exported 1.07 million tons of coffee with a value of 4.13 billion USD. Although it decreased by 12% in volume, Vietnam's coffee export turnover increased by 35.8% compared to the same period.

The impact on the above difference is due to the fact that Vietnam's average coffee export price from the beginning of 2024 to September 15 increased by 54.7% over the same period, from 2,476 USD/ton in the previous period to 3,833 USD/ton in this period.

Regarding the crop season, Vietnam is currently starting to harvest with positive forecasts. Many coffee businesses and associations have surveyed the growing areas and found that thanks to the recent high coffee prices, growers are focusing on taking good care of the coffee.

According to Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association (Dak Lak province), although affected by drought at the beginning of the year, causing a decrease in coffee productivity, the decrease was only about 5-10%, not too serious. Previously, some forecasts said that Vietnam could lose 10-20% of output due to crop failure and shrinking planting area.

Robusta coffee export prices suddenly dropped sharply. Photo: TH

The Vietnam Commodity Exchange has just announced the most traded commodities in Vietnam in the third quarter, Robusta coffee ranked 4th and accounted for 6.8% of total trading volume. Arabica coffee also returned to the race and closed the ranking of the top 10 most traded commodities in Vietnam in the third quarter with a proportion of 5.1%.

In the fourth quarter of this year, many experts believe that commodity prices will fluctuate strongly due to many unpredictable factors appearing in the market such as: increased geopolitical tensions, climate change, extreme weather, etc.

In terms of coffee, prices will generally remain stable and higher than in previous years as supply from the world’s two largest coffee producing markets, Brazil and Vietnam, is expected to decline due to weather conditions that have severely affected the crop, crop quality and yield. Meanwhile, weather developments in the US and South America will also play an important role in influencing the agricultural price chart in the coming time.

Source: https://congthuong.vn/gia-ca-phe-robusta-xuat-khau-bat-ngo-giam-manh-349922.html