Supply is supplemented, export coffee prices turn to decrease

According to the Vietnam Commodity Exchange (MXV), at the end of the trading day on November 21, Robusta coffee prices continued to decline for the third consecutive session, losing 0.92%, and Arabica prices were 1.52% lower than the reference price. MXV said that coffee supplies in the two leading producing countries, Brazil and Vietnam, both showed positive signs, putting pressure on prices yesterday.

Coffee prices turn down

The Brazilian Real has fallen sharply, pushing the USD/BRL exchange rate up nearly 1% compared to the reference. The exchange rate difference has encouraged Brazilian farmers to sell coffee thanks to the large amount of foreign currency earned. In addition, statistics from the Brazilian Coffee Exporters Association (CECAFE) show that the country exported 2.76 million bags of coffee in the first 20 days of November, up 14% compared to 2.42 million bags last month.

Furthermore, the return of rains to Brazil’s main coffee growing regions bodes well for the 2024/25 crop year, leading to a more positive supply outlook.

As for Robusta, Reuters reported that Vietnam has harvested 10-20% of the coffee planned for the 2023/24 crop year. The availability of new coffee has boosted export activities. According to the General Department of Customs, in the first half of November, our country exported 36,968 tons of coffee, twice as high as the same period last month.

In the domestic market, this morning, the price of green coffee beans in the Central Highlands and the Southern provinces continued to weaken by 500 VND/kg. Thus, domestic coffee has continuously decreased in the last 4 days, bringing the purchase price to 57,100 - 57,800 VND/kg.

Vietnam's coffee export prices have remained high for many years.

Although coffee prices have been on a downward trend in recent days, the outlook for coffee exports remains very positive. According to the General Department of Customs, coffee export prices are at their highest in 30 years, averaging over $2,600 per ton in the past two months, up 17% over the same period last year. This crop year, Vietnam’s coffee exports are expected to earn over $4 billion.

According to the Vietnam Coffee and Cocoa Association (VICOFA), in addition to the European market, China's demand for green coffee and instant coffee is also increasing, opening up great opportunities for Vietnam to boost exports to this market. Currently, about 210,000 hectares of coffee in the Central Highlands have applied international standards 4C, UTZ, Flo... participating in global value chains. The promotion of linkages to build high-quality coffee regions has been welcomed by coffee growers. At the same time, it is also a solution to move towards sustainable coffee exports.

Also according to VICOFA, although coffee prices are forecast to increase in the coming time, it is expected that in the 2023-2024 coffee crop, output will decrease by 10% due to the impact of climate change, the intercropping area will increase, farmers will invest in crops with high economic efficiency such as durian and fruit trees. Currently, coffee trees are competing with three types of trees: pepper, avocado and durian, but the main competitor is durian, because the profit that farmers earn from durian trees is about 500 million to 1 billion VND/ha, while the profit from coffee trees is only about 200 million VND/ha, so it is very difficult to call on farmers to keep their coffee gardens.

However, currently, high coffee prices will be an advantage for farmers to maintain their coffee gardens, but in the long term, forming stable chains associated with new brands is the path to sustainable development.

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