World coffee prices adjusted slightly upward on both the New York and London exchanges as the US dollar somewhat cooled down. Further upward momentum on both exchanges was driven by news of continued sharp declines in inventories. However, the market remains strongly influenced by positive crop prospects in Brazil, which are bolstering global supply. This is the main factor putting pressure on coffee prices this past week and in the short term.
According to preliminary statistics from CECAFE (Brazilian Coffee Exporters Association), in the first 16 days of August alone, Brazil exported 400,200 60kg bags of robusta coffee. This is the highest robusta export level compared to the same period in previous months. Brazil's increased robusta coffee exports have eased concerns about supply shortages in the global market.
Meanwhile, Brazil exported more than 1.4 million 60kg bags of arabica coffee beans, a 26% increase compared to the amount shipped abroad during the same period last month. At the same time, the total amount of coffee shipped in the first 18 days of August reached over 2 million bags, an increase of approximately 500,000 bags compared to the same period last month.
In addition, the USD/Brazil exchange rate rising for the third consecutive week also contributed to boosting demand from Brazilian farmers, thereby putting further pressure on coffee prices.
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| Domestic coffee prices today, August 22nd, increased slightly by 100 VND/kg in key purchasing areas. (Source: YouTube) |
At the close of trading on Monday (August 21st) on international futures exchanges, coffee prices rose slightly across both exchanges. Robusta coffee prices on the ICE Futures Europe London exchange for September 2023 delivery increased by $14, trading at $2,558 per ton. The November delivery contract increased by $13, trading at $2,366 per ton. Trading volume was relatively low.
Arabica coffee prices on the ICE Futures US New York exchange for September 2023 delivery rose slightly by 0.1 cent, trading at 147.55 cents/lb. Meanwhile, the December 2023 delivery contract increased by 0.8 cents, trading at 150.80 cents/lb. Trading volume was high for the December delivery contract.
Domestic coffee prices today, August 22nd, increased slightly by 100 VND/kg in key purchasing areas.
Unit of measurement: VND/kg. (Source: Giacaphe.com) |
Inventory levels on both the New York and London futures exchanges continue to decline sharply. According to HedgePoint Global Market, a consulting firm, in July 2023 the European Union (EU) imported 230,000 bags of Conilon robusta coffee from Brazil, bypassing the London auction to reduce costs.
According to statistics from the General Department of Vietnam Customs, in the first 15 days of August, the country exported 37,400 tons of coffee, earning 110.8 million USD; a decrease of 23.3% in volume and 3.5% in value compared to the same period of the previous month. As of mid-August 2023, Vietnam's coffee exports are estimated to have decreased by approximately 4% compared to the same period last year.
Cumulatively from the beginning of the year to August 15th, Vietnam has exported a total of 1.54 million tons of coffee, equivalent to $2.81 billion, a decrease of 20% in volume but an increase of nearly 5% in value compared to the same period last year due to higher coffee export prices.
According to the Financial Times , it is estimated that by 2050, coffee consumption will double from the current level to 6 billion cups per day.
A study by the Columbia Centre for Sustainable Investment also shows that the world's coffee supply needs to increase by 25% by 2030.
Some experts estimate that by 2050, half of the current coffee-growing area will no longer be suitable for this crop. Four out of five of the world's largest coffee-producing countries, including Brazil, Vietnam, Colombia, and Indonesia, may have to reduce their planted area.
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