Coffee prices increase strongly, the price push is still long, Vietnamese coffee reaches record turnover

Coffee prices continue to stay high, which is an opportunity for Vietnam's coffee exports. In the 2022/2023 crop year, Vietnam's coffee exports will earn 4.08 billion USD, up 3.4% compared to the previous crop year thanks to high prices. According to the Vietnam Coffee and Cocoa Association (VICOFA), this is the highest turnover in crop years to date.

World coffee prices rose sharply after a slight correction, as inventories on the two derivatives exchanges remained at very low levels. Vietnam's new crop is not expected to be traded on the market soon. Buying power began to dominate as investors increased their holdings. Meanwhile, concerns about the prospects of coffee supply in Brazil also supported the price recovery.

Domestic coffee prices increased sharply by 1,500 - 1,700 VND/kg, reaching 60,000 VND/kg.

New crop supplies are expected to fall by about 10% as record heatwaves have caused Brazil’s coffee output to plummet, failing to meet global demand. Record-breaking heatwaves in Brazil’s main coffee-growing region are expected to continue through the week. While coffee plants are in the flowering and pod-setting stages, extreme heat will stunt their growth, raising concerns about low new crop yields. A rising real is also discouraging Brazilians from selling their coffee for export.

The Vietnam Coffee and Cocoa Association forecasts that the 2023/2024 coffee crop will be harvested later than the previous crop.

Inventory report on November 14, ICE - London added 590 tons to register at 38,100 tons, an increase of 1.57% compared to the previous day.

Giá cà phê hôm nay 19/3: (Nguồn: Lecafebmt)

Domestic coffee prices today November 16 increased by 1,500 - 1,700 VND/kg in some key purchasing localities. (Source: Lecafebmt)

At the end of the trading session on November 15, the price of robusta coffee on the ICE Futures Europe London exchange for January 2024 delivery increased by 75 USD, trading at 2,549 USD/ton. The March 2024 delivery period increased by 80 USD, trading at 2,473 USD/ton. Average trading volume.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery increased by 4.35 cents, trading at 180.80 cents/lb. Meanwhile, the March 2024 delivery price increased by 3.75 cents, trading at 175.15 cents/lb. Trading volume is high on average.

Domestic coffee prices today November 16 increased by 1,500 - 1,700 VND/kg in some key purchasing localities.

Average price	Medium
USD/VND exchange rate	24,070	- 90
DAK LAK	60,900	+ 1,700
LAM DONG	60,000	+ 1,500
GIA LAI	60,700	+ 1,700
DAK NONG	60,800	+ 1,700

Unit: VND/kg.

(Source: Giacaphe.com)

The US CPI report was a bit lower than expected and core inflation for the year was lower than estimated, leading to speculation that the US Federal Reserve (FED) will end its interest rate hike cycle at its next meeting. This weakened the US dollar's safe-haven status and money flowed to other markets, thereby stimulating speculators to increase their net long positions.

The Brazilian Coffee Exporters Association (Cacafé) reported October exports of 4.4 million bags, up 21% year-on-year, with robusta exports up 479.5% year-on-year in 2022. Concerns about high temperatures hitting the southern Arabica coffee region remain on the radar of observers.

Notably, Vietnam and Indonesia also increased robusta imports from Brazil with increases of 565.3% and 123.2% respectively in the first 10 months of this year.

The decline in supply will continue to be the driving force for higher coffee export prices. Vietnam currently ranks 6th in the world in terms of coffee acreage (after Brazil: 1.9 million hectares; Indonesia: 1.2 million hectares; Colombia, Ethiopia and Ivory Coast each have around 800,000 hectares). However, thanks to Vietnam's highest coffee productivity in the world, 2.8 times higher than Indonesia's, Vietnam has the second largest annual coffee harvest in the world, reaching 1.75 - 1.85 million tons.

Source