Coffee output in 2023-2024 crop year will decrease by 20% to 1.47 million tons

At the end of the most recent trading session, the price of Robusta coffee in London for July 2024 delivery increased by 73 USD/ton, at 3,892 USD/ton, and for September 2024 delivery increased by 67 USD/ton, at 3,806 USD/ton.

Arabica coffee prices for July 2024 delivery increased by 2.6 cents/lb, to 218.25 cents/lb, and for September 2024 delivery increased by 2.55 cents/lb, to 217.35 cents/lb.

Last week, Robusta coffee futures for July delivery increased by $374. Arabica coffee futures for July delivery increased by 11.65 cents. Domestic coffee prices increased by an average of VND11,000/kg.

The Vietnam Commodity Exchange said the coffee market quickly regained momentum with Robusta up 10.6% and Arabica up 5.6%. Poor supply in major producing countries is causing concerns about coffee shortages in the market, thereby supporting prices to rise again.

In its second 2024 crop survey report, the Brazilian government 's Crop Supply Agency CONAB raised its Robusta coffee production forecast to 58.8 million bags, up slightly from the previous 58.1 million bags.

However, CONAB lowered its forecast for the country's Robusta coffee output by 600,000 bags to 16.7 million bags in its latest report.

Additionally, information from Brazilian farmers said that their Arabica coffee harvest is quite slow and small fruit size could affect this year's output.

Last week’s rally in coffee was attributed to multiple sources, including Volcafe, a trader who said Vietnam’s robusta coffee output in the 2024/25 crop year could reach just 24 million bags, the lowest in 13 years, as poor rainfall in Vietnam has caused “irreparable damage.”

In addition, the shortage of empty containers, pushing up shipping rates, has been reflected in the selling prices of agricultural products.

In addition, some experts pointed out that the European Union's upcoming application of anti-deforestation regulations on imported goods into this market, including coffee, is also a factor pushing up coffee prices as a significant portion of the world's coffee acreage comes from deforestation.

Commenting on the market this week, experts said that the upward trend is still continuing in the context of sea freight rates not being able to "cool down". However, it is difficult to return to the previous record peak of 135,000 VND/kg.

In the domestic market, recorded at the end of last week (May 25), the price of green coffee beans in the Central Highlands and the Southern provinces increased by 1,500 VND/kg, bringing the domestic coffee purchase price to 114,500 - 116,000 VND/kg. Compared to the previous week, the domestic coffee price has increased sharply by about 12,000 VND/kg.

Vietnam's coffee output in the 2023-2024 crop year could fall by 20% to 1.47 million tonnes. Photo: VNA

Overall, last week, despite the downward pressure at the weekend, domestic coffee prices still increased by an average of nearly 10%, equivalent to VND11,000/kg. Compared to the record high price of nearly VND140,000/kg set at the end of April, the current price level is only about 15% lower.

Vietnam's coffee output in the 2023-2024 crop year could fall 20% to 1.47 million tonnes, the lowest in four years, due to drought, the Ministry of Agriculture and Rural Development said.

This news has pushed Robusta coffee prices in the domestic market of Vietnam to an unprecedented high in just a few days. Vietnam is ranked as the second largest producer of coffee beans in the world and the largest producer of Robusta coffee. But many domestic farmers are switching to growing durian, reducing the area of ​​coffee cultivation and reducing supply.

Coffee grows best in the tropics, and increasing efforts to combat deforestation make it increasingly difficult to find new land to grow coffee.

The trend comes amid increasingly tight supplies due to the El Nino weather phenomenon causing drought in Southeast Asia.

In Dak Nong, this province has about 142,000 hectares of coffee, with an output of over 360,000 tons. Dak Nong's coffee area and output rank third in the country and the Central Highlands region (after Dak Lak and Lam Dong provinces). In recent years, when coffee prices were low and not commensurate with investment and care, many farmers gradually switched to higher-value crops. This year, the record high coffee prices will be an opportunity to encourage farmers to continue investing in care and restoring this crop area.

Source: https://congthuong.vn/san-luong-ca-phe-nien-vu-2023-2024-se-giam-20-xuong-147-trieu-tan-322538.html