Coffee export prices continue to rise amid concerns about supply shortage

According to the Vietnam Commodity Exchange (MXV), low coffee inventories and limited sales by farmers have kept concerns of a short-term supply shortage alive and supported rising prices.

Arabica coffee prices continue to rise

In its coffee market report released on December 21, the US Department of Agriculture (USDA) estimated that global coffee inventories in the current crop year will be only 26.5 million 60kg bags, down 16.7% from the previous report and 4% from the estimate for the 2022/2023 crop year. This is also the lowest inventory level recorded in the past 12 years. Along with that, the standard Arabica inventory on the ICE-US, although recovering, is still increasing very slowly and remains at a 24-year low, with 247,912 60kg bags.

Moreover, the USD/BRL exchange rate dropped sharply by 0.92% yesterday, limiting the demand for coffee sales of Brazilian farmers due to less foreign currency earned.

Vietnam's coffee exports continue to benefit in price due to supply tensions

According to the Vietnam Coffee and Cocoa Association (Vicofa), in November 2023, Vietnam exported about 200,000 tons of coffee, but Vicofa estimated that half of this was to pay off debts for the previous crop.

Assessing the 2023/2024 crop year, Vicofa forecasts that output may decrease by 5-10%, equivalent to an output of only about 1.6 - 1.7 million tons and expected export output will only reach about 1.4 million tons.

In the context of tight supply, the Vietnamese coffee industry is also focusing on many solutions for sustainable development, traceability, especially meeting the EU's EUDR anti-deforestation regulations. Currently, the world's major roasters such as JDE, Nestle, Tchibo... are coordinating with governments, international organizations, businesses... to build sustainable coffee programs as well as commit to sharply increasing certified coffee production in the coming years.

Industry experts say that Vietnam is one of the most active participants in demonstrating its responsibility to protect the environment and nature in the European Parliament’s regulation on combating deforestation and forest degradation (EUDR). Since April 2023, the Minister of Agriculture and Rural Development has held many meetings with localities, associations, and non-governmental organizations to discuss and find a roadmap for implementation under the EUDR.

According to Mr. Pham Quang Anh - Director of the Vietnam Commodity News Center - MXV, looking at it positively, this is the driving force for the Vietnamese coffee industry to make changes and improvements to keep up with the general trend of major export markets. If done well in this period, it will create the premise to maintain Vietnam's leading position, not only in terms of output and export, but also in terms of quality and scale of the entire industry.

Source link: https://congthuong.vn/gia-xuat-khau-ca-phe-tiep-tuc-tang-truoc-lo-ngai-thieu-hut-nguon-cung-294365.html