Coffee prices break all records on El Nino news

"El Nino has appeared" is the information announced by the US National Oceanic and Atmospheric Administration (NOAA) on June 8. As soon as this information was released, coffee prices from exchanges in London and New York continuously increased, surpassing all price records. This also caused coffee prices in growing areas in the Central Highlands to increase sharply.

Coffee prices are rising sharply due to El Nino news.

According to Reuters, on the day the El Nino news was announced, sugar and coffee futures prices rose sharply. Early signs of the El Nino phenomenon, such as hot and dry weather, are threatening food producers across Asia. Traders predict that a strong El Nino could affect sugar production in India and Thailand, and could disrupt the sugarcane harvest in Brazil. They also see risks to coffee production in Vietnam, the world's second-largest producer. In addition, El Nino will affect palm oil production in Indonesia, Malaysia - which supplies 80% of the world's palm oil - as well as Thai rice.

The strongest and fastest reaction was in coffee. On the world market, as of June 10, the price of robusta coffee for July delivery on the New York Stock Exchange reached a record of 2,728 USD/ton, up 46% compared to the beginning of this year and an all-time high.

In the domestic market, in response to the news of El Nino and the increase in world prices, coffee prices in the Central Highlands provinces increased by 1,900 - 2,100 VND/kg. The highest transaction price of 65,200 VND/kg was recorded in Dak Nong province. It then decreased slightly by 400 VND/kg on June 10. However, if calculated for the whole week, coffee prices increased by an average of 3,600 VND/kg. As of today (June 12), the market continued to increase by 100 - 300 VND/kg; reaching the highest level of 65,100 VND/kg, recorded in Dak Nong province. Similarly, coffee prices in Dak Lak province also increased by 200 VND, to 65,000 VND/kg. Lam Dong province increased by 300 VND/kg, to 64,400 VND/kg.

The International Coffee Organization (ICO) said that in May 2023, the world price of robusta coffee increased by 5.9% compared to the previous month, reaching an average of 122.5 US cents/pound, the highest level since August 1995 (price of 130.2 US cents/pound). In the first week of June, the price of robusta coffee climbed to more than 134 US cents/pound.

How coffee prices will develop in the coming time is still a question mark for many experts in this industry.

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