Low inventories, Robusta coffee prices lead the increase

According to the Vietnam Commodity Exchange (MXV), at the end of the trading session on February 29, the prices of two coffee commodities improved and regained what they had “lost” in the previous session. Of which, Robusta prices led the increase with a 1.68% increase. Dismal export figures in Indonesia, along with low inventories on the ICE, were factors that pushed up the price of coffee.

According to data from the Indonesian government, the country's Sumatra Robusta coffee exports in January 2024 reached 3,192 tons, down 79% compared to the same period last year. Along with that, concerns about supply shortages are still difficult to eliminate when Robusta inventories on the ICE-EU Exchange slightly decreased by 10 tons in the session on February 28, bringing the total certified coffee volume at the Exchange down to 24,530 tons.

Robusta prices lead the increase with 1.68%, Arabica prices regain momentum

Arabica prices recovered 1.43% under technical support, despite the improvement in standard inventory data on the ICE-US Exchange. Specifically, at the end of the session on February 28, the amount of certified coffee on the ICE Exchange increased sharply by nearly 9,000 bags, bringing the total number of certified coffee here to 342,766 bags. Moreover, the amount of coffee awaiting classification remained high at nearly 148,750 bags, a large surplus for inventory to continue to expand in the following sessions.

The International Coffee Organization (ICO) forecasts global coffee production in 2023/24 to increase by 5.8% year-on-year to 178 million bags due to an exceptional biennial harvest year, while global coffee consumption in the same period will increase by 2.2% year-on-year to 177 million bags, resulting in a surplus of 1 million bags of coffee.

In its 6-month report released on December 21, the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) predicted that world coffee production in 2023/24 will increase by 4.2% year-on-year to 171.4 million bags, with Arabica production increasing by 10.7% to 97.3 million bags and Robusta production falling by 3.3% to 74.1 million bags.

According to FAS's forecast, ending stocks in MY2023/24 will decline by 4.0% to 26.5 million bags from 27.6 million bags in MY2022-23, while Brazil's 2023/24 Arabica coffee production will increase by 12.8% year-on-year to 44.9 million bags due to higher yields and increased planting area. However, Robusta coffee supplies from Vietnam are scarce.

According to preliminary statistics from the General Statistics Office, the volume of coffee exported in February 2024 reached 160 thousand tons, down 32.8% compared to the previous month and down 20.1% compared to the same period in 2023; turnover reached 524 million USD, down 27.9% compared to the previous month, but up 20.3% compared to the same period in 2023.

In the first two months of 2024, the estimated volume of exported coffee reached 398 thousand tons, up 16.2% over the same period in 2023; turnover reached 1.25 billion USD, up 67.5%.

The average export coffee price in February 2024 increased for the second consecutive month and reached the highest level in the past 4 months, estimated at 3,276 USD/ton, up 7.4% over the previous month and up 50.6% over the same period in 2023.

In the first two months of 2024, the average export price of coffee reached 3,140 USD/ton, an increase of 44.1% over the same period in 2023.

Accumulated in the first 2 months of 2024, the average export price of coffee reached 3,140 USD/ton, an increase of 44.1% over the same period in 2023.

According to Mr. Le Duc Huy, General Director of Simexco DakLak in the Central Highlands, the coffee growing area has been reduced due to people switching to growing durian, however, thanks to the high productivity, this year's coffee output is the same as last year. However, there is a problem that this year's quantity is short due to having to compensate for the shortfall last year, thus leading to the shortage of goods coming earlier, as early as February.

Meanwhile, according to the International Coffee Organization (ICO), traders in Vietnam are still holding back coffee beans in anticipation of higher prices, further exacerbating supply problems.

Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association, said that this crop year has a serious imbalance between supply and demand, causing price fluctuations. Major coffee producing countries such as Brazil, Vietnam, Indonesia, and India have all been affected by crop failures, with output decreasing by about 10-15%.

Coffee prices rose again when US inflation data was released as expected by the market, said expert Nguyen Quang Binh. US prices continued to rise in January 2024, but at the lowest level in nearly 3 years, reinforcing speculation that the US Federal Reserve (Fed) will cut interest rates in June.

Source: https://congthuong.vn/ton-kho-ve-muc-thap-gia-ca-phe-robusta-dan-dau-da-tang-306147.html