Coffee prices soar, exports unexpectedly drop sharply, market awaits EUDR ruling

Vietnam's coffee exports in October reached only 45,412 tons, down 11.6% compared to the previous month. In the first 10 months of the year, Vietnam's coffee exports decreased by 11.1% compared to the same period last year, down to 1.15 million tons, according to a report by the General Department of Vietnam Customs.

Coffee price today 11/12/2024

World coffee prices turned green across the board, rising sharply in the first trading session of the week. Robusta coffee prices on the London floor increased the most - 100 USD/ton and Arabica added 2.85 Cent/Ib.

Domestic coffee prices today, November 12, are trading in the range of 108,000 - 108,700 VND/kg. All localities have entered the new coffee harvest season 2024 - 2025. The harvest is expected to last from November 2024 to January 2025. However, it is currently forecasted that many provinces in the Central Highlands will experience dangerous weather phenomena such as tropical depressions, heavy rain, thunderstorms, tornadoes, lightning, and hail. This situation will affect the harvest, thereby affecting market prices.

Lack of rain in Brazil and lower export figures from Vietnam in October 2024 have added to market concerns. Arabica coffee prices rose on expectations of continued hot and dry weather in Minas Gerais state, Brazil’s largest arabica-producing region, which could reduce yields and lead to lower production. Meanwhile, meteorologist Climatempo said that after a brief spell of rain in Minas Gerais in the middle of the week, the region’s 10-day forecast is hotter and drier, according to Barchart.

The high price of robusta coffee in the world is also due to the information of a sharp decrease in exports from Vietnam's supply, according to the report of the General Department of Vietnam Customs - in the first 10 months of the year, Vietnam's coffee exports decreased by 11.1% compared to the same period last year. Meanwhile, in the immediate future, there are consecutive storms in the East Sea, which may not cause much damage but may cause rain during the harvest.

The Vietnam Coffee and Cocoa Association (Vicofa) said that the coffee acreage is increasingly shrinking due to low coffee prices in previous years, affecting people's income, so people have switched to other crops. Therefore, increasing acreage and increasing tree output in the short term is quite difficult. Currently, provinces such as Dak Lak and Dak Nong forecast that the coffee output in the 2024/25 crop may decrease by 5-10% compared to the previous crop. The reason is that thousands of hectares of coffee trees suffered from drought and water shortages in the dry season of 2024, affecting the ability of the trees to grow.

According to the National Center for Hydro-Meteorological Forecasting, due to the impact of storm No. 7, on the day and night of November 12, the Central Highlands region will have moderate rain, heavy rain, locally very heavy rain and thunderstorms with rainfall from 40-90mm, locally over 180mm. During thunderstorms, there is a possibility of tornadoes, lightning and strong gusts of wind. It is forecasted that from the night of November 13, heavy rain will end in the Central region and the Central Highlands. Warning, heavy rain is likely to cause flooding in low-lying areas; flash floods on small rivers and streams, landslides on steep slopes.

Domestic coffee prices today, November 12, increased sharply by 2,400 - 2,500 VND/kg in some key purchasing localities. (Source: Braziliancoffee)

According to World & Vietnam , at the end of the first trading session of the week (November 11), the price of robusta coffee on the ICE Futures Europe London exchange increased sharply by 3 digits, the delivery term for January 2025 increased by 100 USD, trading at 4,476 USD/ton. The delivery term for March 2025 increased by 94 USD, trading at 4,412 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange increased, with the December 2024 delivery period increasing by 2.85 cents, trading at 256.2 cents/lb. Meanwhile, the March 2025 delivery period increased by 2.75 cents, trading at 255.85 cents/lb. Trading volume was high on average.

Domestic coffee prices today, November 12, increased sharply by 2,400 - 2,500 VND/kg in some key purchasing localities. Unit: VND/kg

Average price	Medium
USD/VND exchange rate	250.90	+ 40
DAK LAK	109,500	+ 2,500
LAM DONG	109,000	+ 2,500
GIA LAI	109,400	+ 2,400
DAK NONG	109,700	+ 2,500

(Source: giacaphe.com)

Commenting on the market this week, experts said that the pressure of new crops from Vietnam continues to push prices down. However, the Fed's move to cut interest rates last week has had positive impacts. Currently, all parties are waiting for clearer signals about the policies of Mr. Trump, who was re-elected in the race for the White House. In this situation, capital flows are likely to withdraw to speculative exchanges, including coffee. Thus, this week's upward trend is well-founded.

On November 13-14, the EU will make an official decision on the implementation date of the European Deforestation Regulation (EUDR), another factor that could have a strong impact on coffee prices in the short term.

The Vietnam Commodity Exchange has proposed two scenarios for coffee prices that will occur after the EU finalizes the implementation date of the EUDR. If the EU decides to maintain the implementation roadmap of the EUDR, starting from December 30, 2024. This decision will receive support from environmental protection organizations but is a major barrier to the current flow of coffee. Coffee producing countries around the world cannot fully meet the requirements of the EUDR while importing countries have to race to find sources of goods to ensure consumption.

In the short term, importing countries will increase purchases in the remaining months of 2024, causing coffee demand in the market to skyrocket. Meanwhile, market supply is unlikely to meet the sudden increase in demand, especially when Vietnam has just started harvesting coffee for the 2024-2025 crop. This will cause a situation where supply is smaller than demand, thereby creating important support for coffee prices in the last two months of the year.

In the long term, exporting countries that cannot supply large customers such as the EU will have to find new customers. Similarly, importing countries will also have to find new sources of goods that meet their requirements to serve consumption. Thus, the market needs a period of time for supply and demand to return to a stable state.

In the second scenario, the EU decides to delay the implementation of the EUDR, most likely by 12 months as proposed by the EC. This decision would receive consensus from the units in the coffee supply chain instead of environmental organizations. Producing countries would have more time to fully comply with the new standards. At the same time, importing countries in the EU would not need to import massively in late 2024.

With this scenario, experts say that coffee supply and demand in the market will temporarily stabilize, along with the additional supply from coffee harvested in Vietnam's 2024-2025 crop year, the world coffee price will likely only stay below 4,700 USD/ton. Similarly, domestic coffee prices will also only fluctuate between 100,000 - 110,000 VND/kg.

Source: https://baoquocte.vn/gia-ca-phe-hom-nay-12112024-gia-ca-phe-tang-vot-xuat-khau-bat-ngo-giam-manh-thi-truong-cho-phan-quyet-ve-eudr-293342.html