Coffee export prices suddenly turn down

EVFTA Agreement and the double impact on coffee exports to the EU Coffee export prices continue to peak due to supply concerns

According to the Vietnam Commodity Exchange (MXV), at the end of the trading session on December 18, Robusta coffee prices reversed and decreased by 1.03% after 5 consecutive sessions of increase. Pressure from technical factors has overwhelmed support from fundamental information for Robusta prices. Currently, Robusta inventories on the Intercontinental European Exchange (ICE-EU) are at 34,220 tons, gradually decreasing to the lowest level in history at the end of August, with 33,660 tons.

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Robusta coffee prices suddenly drop

Meanwhile, conflicting fundamentals caused Arabica prices to fluctuate sharply, closing the first session of the week with prices up 0.95% compared to the reference price. The intense heat in Brazil's main coffee growing region is expected to ease and rainfall to increase significantly in the next 10 days. This creates conditions for better growth of coffee trees in the 2024/25 crop, but there are also doubts about the ability of the crop to adapt to changing weather conditions.

Certified Arabica stocks on the ICE-US exchange are recovering from their lowest level in more than 24 years, but the pace of increase remains slow. Certified coffee stocks rose by 6,740 60-kg bags last week, bringing the total recovery to 18,333 bags. However, the total increase in certified coffee over two weeks is still less than a third of the bags lost in the two days before hitting the lowest level in more than 24 years.

In the domestic market, recorded this morning (December 19), the price of green coffee beans in the Central Highlands and the Southern provinces fluctuated between 66,300 - 66,700 VND/kg, continuing to increase compared to yesterday. This is a fairly high price for Vietnamese coffee, creating conditions for farmers to have a significant source of income.

Domestic coffee prices remain high

Currently, Vietnam's production localities are entering the new crop year 2023-2024 and have harvested about 50% of the output. Due to unfavorable weather, Vietnam's coffee output this crop year is expected to decrease compared to the crop year 2022/2023.

Mr. Nguyen Nam Hai - Chairman of the Vietnam Coffee and Cocoa Association, said that in the 2022-2023 crop year, global coffee exports reached 110.8 million bags, down 5.5% compared to the previous crop year.

In Vietnam, the amount of coffee exported this year also decreased by about 15%. However, in return, the price of coffee beans increased, at times reaching up to 70,000 VND/kg.

The 2023/2024 crop year is expected to face many difficulties and challenges for the global coffee industry. Climate change and extreme weather events will greatly affect the global coffee supply, causing productivity and quality to decrease.

Coffee prices are expected to continue to rise due to concerns about supply shortages. Although Vietnam has entered the 2023/2024 coffee harvest season, supply shortages are still occurring while demand is high. In particular, European import demand is very large and the supply is almost entirely from Vietnam's Robusta coffee, at least from now until the end of April 2024.

Currently, coffee acreage is shrinking in many key growing regions. In the 2023/2024 crop year, Vietnam's coffee output is expected to decrease to around 1.6-1.7 million tons. It is estimated that our country's coffee exports in the 2023-2024 crop year will continue to decrease to around 1.4 million tons. It is likely that coffee prices in Vietnam will continue to increase and may be at the highest level in the world in 2024.

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