Supply drops sharply, coffee exports soar

Shortage of supply, coffee exports continue to have the opportunity to increase Arabica prices increase sharply, Vietnam's coffee exports are expected to increase at the end of the year

According to the Vietnam Commodity Exchange (MXV), at the end of the trading session on November 30, the prices of two coffee products increased dramatically with 6.95% for Arabica in the March contract and 3.49% for Robusta in the January contract. Inventory on the Intercontinental Commodity Exchange (ICE) suddenly decreased sharply with previous positive signals, along with concerns that Brazilian farmers were limiting sales, causing coffee prices to increase in yesterday's session.

Nguồn cung giảm sâu, xuất khẩu cà phê tăng vọt

Prices of two coffee products skyrocket

Certified Arabica stocks on the Intercontinental Exchange (ICE-US) closed the session on November 29 with a sudden drop of 33,764 60kg bags, losing all the gains of the past two weeks. The sharp drop in yesterday's session even pushed the total certified Arabica volume down to 259,800 tons, setting a new record low in more than 24 years.

According to the latest information, the amount of certified Arabica after the session on November 30 decreased by another 35,734 bags, down to 224,066 bags. This is the lowest certified inventory level since March 1999.

In addition, observers say Brazilian farmers appear to be holding back on coffee sales after ramping up sales in October and early November. This has also contributed to a sharper price increase.

In the domestic market, this morning (December 1), the price of green coffee beans in the Central Highlands and the Southern provinces also increased by 100 VND/kg. Accordingly, domestic coffee is being purchased at around 57,800 - 58,900 VND/kg.

Coffee prices could reach more than $2,300/ton

According to the synthesis source, the current progress of the 2023/24 coffee harvest in Vietnam has reached 30% of the plan and the concentrated harvest is expected to take place this December. Thus, it is highly likely that in the first month of 2024, farmers' coffee harvesting activities will be basically completed and the supply will be clearly defined.

Meanwhile, Brazil’s Robusta exports may slow down, and the focus now shifts to Vietnam. Taking advantage of high prices, Brazil has exported 2.51 million bags of Robusta in the last four months alone, up 171% from the total in 2022/23 and nearly five times more than in the same period last year, according to data from the Brazilian Coffee Exporters Association (CECAFE). This could leave Brazil temporarily out of supplies before the new crop year begins in July 2024.

Mr. Nguyen Duc Dung - Deputy General Director of MXV commented that in the first months of 2024, Vietnam's Robusta supply may dominate the global market share. With the amount of coffee available thanks to harvesting activities, coffee prices are expected to decrease in the short term. However, the adjustment will be relatively gentle and prices may stay above 2,300 USD/ton.

Vietnam is the world's second largest coffee exporter after Brazil, but the coffee exported is mainly raw material.

To increase the value of exported coffee, Vietnamese enterprises have made efforts to bring products with their own brands to the market. For example, Phuc Sinh recently signed a cooperation agreement with LNS International Corporation (LNS) to bring K Coffee products to supermarkets and food chains in the US from 2022. In particular, LNS has deployed and sold this product on the world's largest e-commerce sites: Amazon, Walmart, Faire (B2B). From December, K Coffee products will also be exported by LNS to Europe, Australia - New Zealand and Japan.

This marks a milestone in the development of the Vietnamese coffee brand on the world map. From here, many international consumers will have closer access to Vietnamese coffee products, thereby affirming the position and positioning of the Vietnamese coffee brand in the world.

Since the beginning of the year, Phuc Sinh Consumer has exported about 5,000 boxes (5 containers) of K Coffee to the US market. In 2024, it is expected to export about 15,000 boxes (15 containers) to the US, Europe, Australia - New Zealand, Japan and will expand to new markets in addition to the markets it has distributed.

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