Scarce supply, coffee exports will decrease month by month

According to the Vietnam Commodity Exchange (MXV), Robusta coffee prices increased by more than 10% at the end of the last trading week, reaching a new historical peak of 4,617 USD/ton. Arabica coffee prices increased for the third consecutive week, bringing the current trading price to its highest level in more than two years. Limited coffee supplies in leading producing countries and a weakening exchange rate have supported the price increase.

In Vietnam, according to the General Department of Customs, in June, the volume of coffee exports was only nearly half that of the same period last year, down 11.5% compared to the previous month. In the first half of this year, the export volume also decreased by 11.4% compared to the same period in 2023. In addition, the market continues to be pessimistic about the prospect of new-crop coffee supply in Vietnam. Forecasts from domestic and foreign organizations show that our country's coffee output in the 2024-2025 crop will decrease by 15-20% compared to the current crop. Low output will lead to a decline in export activities, while also making the supply shortage in the market more serious.

Many experts believe that the source is also gradually becoming scarce, and export activities will gradually decrease month by month. In fact, our country's coffee export volume will only improve from the end of the year when the new crop is harvested.

Some coffee companies said that their warehouses are almost empty, while October is the beginning of the new harvest season in our country. This is also a factor that has pushed the price of green coffee beans on the market to increase sharply and stay at a very high level.

Coffee supply in Vietnam continues to be scarce

Similarly, in Brazil, the Coffee Exporters Association of Brazil (CECAFE) forecasts that Robusta coffee production could fall by 10% compared to initial estimates, while Arabica coffee production could fall by 5%. In addition, the Dollar Index has just fallen for the second consecutive week after the US announced CPI, causing the USD/BRL exchange rate to lose 0.56%. The narrowing exchange rate gap somewhat limits Brazilian farmers from selling their coffee, thereby also pushing prices up.

Of which, exports from Vietnam, the region's largest coffee producer and exporter, fell 46.9% to 1.36 million bags in May. This was the fourth consecutive month of decline and the sixth month since the beginning of the crop year.

Vietnam’s coffee prices are showing bright prospects, but with that comes great challenges in terms of quality and sustainable development. Proper attention and investment will be the key factor to help the Vietnamese coffee industry continue to expand in the international market.

The high coffee prices have been benefiting farmers, but causing many difficulties for businesses. To support businesses, the International Finance Corporation (IFC) and Vietnam Prosperity Joint Stock Commercial Bank (VPBank) have recently cooperated to co-finance the supply chain for coffee exporting companies, in an effort to support the Vietnamese small and medium-sized enterprise (SME) community to participate more deeply in the global agricultural supply chain.

With a total financing value of up to 150 million USD, in which IFC and VPBank provide capital in equal proportions. This is the first factored supply chain co-financing program that IFC cooperates with a domestic commercial bank to implement in Vietnam.

The supply chain finance program is expected to provide initial capital for coffee exporters and in other sectors at a later stage, opening up opportunities to access the global agricultural supply chain for Vietnamese private enterprises.

Source: https://congthuong.vn/nguon-cung-khan-hiem-xuat-khau-ca-phe-se-giam-dan-theo-tung-thang-332301.html