Coffee export prices rise as supply from Vietnam forecast to drop 20%

Coffee export prices increase across the board, Robusta reaches peak level Coffee export prices increase for 4 consecutive weeks, reaching highest price level

According to the Vietnam Commodity Exchange (MXV), at the end of the session on March 25, the prices of two coffee products continued to increase by 1.29% for Arabica and 1.4% for Robusta, respectively. Concerns about supply risks in the market were a factor supporting Arabica prices in yesterday's session.

In the closing report on March 25, the standard Arabica inventory on the ICE-US continued to be supplemented with nearly 9,000 60kg bags, bringing the total amount of Arabica in storage to the highest level in more than 9 months, reaching 577,023 bags.

However, the amount of coffee awaiting grading to be added to ICE’s reserves has been continuously recorded to decrease in the past two weeks, to about 80,000 bags. This may limit the ability to expand the surplus for the inventory data in the coming time.

Giá cà phê xuất khẩu tăng khi dự báo nguồn cung từ Việt Nam giảm 20%

The prices of two coffee products continued to increase by 1.29% for Arabica and 1.4% for Robusta, respectively.

Regarding Robusta, the Vietnam Coffee Association (Vicofa) estimates that the country's coffee exports in the 2023/24 crop year will decrease by 20% compared to the previous crop year, down to 1.336 million tons. Production has decreased after facing dry weather. These negative signals have contributed to increasing concerns about supply shortages in the market.

According to the Vietnam Coffee and Cocoa Association (Vicofa), the forecast is only about 1.6 - 1.7 million tons, lower than the 1.78 million tons of the previous crop year 2022/2023. The above information has pushed the price of Robusta coffee futures on the London floor to set a new record, pulling Arabica back to the uptrend.

General Director of Dak Lak 2/9 Import-Export Company Limited (Simexco Dak Lak) Le Duc Huy said that currently the unit will only accept more orders if there are positive signs from the supply from farmers.

Vietnam's coffee export volume in the 2023/24 crop year will decrease by 20% compared to the previous crop year, down to 1.336 million tons.

However, the amount of coffee stored by the people has begun to run out and become scarce. Considering the unfavorable weather conditions for crops, the forecast for the upcoming crop season is that the output will decrease, leading to a shortage of supply, which is the biggest concern for businesses.

Experts believe that with the current good coffee prices, farmers benefit the most, with increased income. However, to harmonize the interests of all parties, it is necessary for farmers to share with businesses operating in the coffee sector so that local agricultural products have both output and stable development.

According to the leader of the Department of Agriculture and Rural Development of Dak Lak province, with the current good coffee price, farmers benefit the most, with increased income. However, to harmonize the interests of all parties, it is necessary for farmers to share with businesses operating in the coffee sector so that local agricultural products have both output and stable development.

The coffee market is in a fever phase, focusing on Robusta – the type of coffee that Vietnam is the number 1 supplier to the world. The current sharp increase in domestic coffee prices is due to a nearly 20% decrease in Robusta production, partly due to the impact of climate change and the strong impact of the El Nino phenomenon.

Over the years, coffee processing plants around the world have become increasingly dependent on Vietnam’s Robusta raw materials. However, they are used to setting low prices to gain high profits.

Robusta coffee is a product consumed globally, and for many people, it is an essential commodity that cannot be abandoned. But for farmers, if growing coffee is not profitable, they are willing to give up – which will be a threat to the world supply. This year, the Central Highlands suffered a drought, and a serious shortage of Robusta coffee is still ahead.

Robusta coffee production has dropped sharply by nearly 2 million bags in Vietnam, which is one of the reasons for the price increase. However, Robusta coffee production in many other sources such as India, Indonesia... has also decreased sharply this year.

Vietnamese Robusta coffee is in a "golden opportunity" to build a national brand when it has all the elements such as high quality, good value, and modest output. Analysts say that, year by year, coffee processing factories around the world are increasingly dependent on Vietnam's Robusta raw materials, but they are used to setting low prices for high profits. Meanwhile, it is predicted that a serious shortage of Robusta coffee is still ahead, the time of cheap raw coffee is over.

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