As the new season approaches, coffee exports are expected to rebound.

According to the Vietnam Commodity Exchange (MXV), at the close of trading on October 4th, Arabica coffee prices continued to fall by 1.61%. Simultaneously, Robusta prices were also 1% lower than the reference price, pushing prices to their lowest level in over a month. MXV stated that strong supply from Brazil continued to be the main factor putting pressure on prices.

Coffee prices fell slightly on October 4th.

According to information from the Brazilian government, the world's largest coffee supplier exported 177,685 tons of green coffee beans (2.69 million 60kg bags), a 10.5% increase compared to 169,678 tons in the same period of 2022.

At the same time, increased rainfall and frequency in Brazil's main coffee-producing regions provide moisture and reduce heat, allowing coffee plants to flower better. This helps mitigate negative concerns about coffee yields for the 2024/25 crop year.

Furthermore, positive signs in coffee inventories on the Intercontinental Exchange (ICE) are also putting some pressure on prices. Certified Arabica inventories on the ICE-US exchange closed on October 3rd with an increase of 2,926 60kg bags, reaching 444,871 bags. Meanwhile, Robusta coffee inventories on the ICE-EU exchange are at 42,380 tons, a significant increase from the low point in August, just under 34,000 tons.

On the domestic market, similar to global price trends, this morning, the price of bulk green coffee beans in the Central Highlands and Southern provinces continued to be adjusted downwards for the fourth consecutive day, with a decrease of approximately 400-600 VND/kg. After the adjustment, the domestic coffee price is currently being purchased at around 65,400-65,000 VND/kg.

The new coffee crop year will begin in the fourth quarter of 2023 and the first quarter of 2024.

According to the latest figures from the General Statistics Office, Vietnam's coffee exports in September fell sharply, reaching 65,000 tons, down 23.2% compared to August and down 32.7% compared to the same period in 2022. Export value reached US$205 million, down 20.8% compared to August and down 12.8% compared to the same period last year.

In the first nine months of 2023, Vietnam's coffee exports reached 1.27 million tons, a decrease of 7.3% compared to the same period last year; the value reached 3.16 billion USD, an increase of 1.9%.

However, according to the Import-Export Department of the Ministry of Industry and Trade , in the first nine months of 2023, the average export price of Vietnamese coffee remained high, estimated at US$2,499 per ton, an increase of 9.9% compared to the same period in 2022. This is the highest price in many years.

Coffee exports are expected to rebound from November as Vietnam enters the 2023-2024 coffee harvest season (taking place in Q4 2023 and early Q1 2024). Meanwhile, domestic coffee prices may also fall. However, prices have already established a new benchmark due to rising input costs such as electricity, fertilizers, and pesticides. In the short term, domestic coffee prices are forecast to remain above VND 64,000/kg.

Over the past three decades (since the reforms of 1986), coffee has been one of the most important contributors to the revenue of Vietnam's agricultural sector in particular and to the national GDP in general.

The coffee industry has created over half a million direct and indirect jobs and is the primary source of livelihood for thousands of households in agricultural production areas. Coffee exports typically account for around 15% of total agricultural exports, and its share of agricultural GDP has consistently exceeded 10% in recent years. Coffee is also a key export item within the agricultural sector.

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