Coffee prices adjust up, Brazil boosts robusta exports; world supply needs to increase further

This week, Brazil's coffee exports will continue to be the focus of the market. Data from the Brazilian coffee industry will provide more specific information on the ability to offset global supply shortages, thereby affecting prices on world exchanges.

World coffee prices increased slightly on both New York and London exchanges as the USD cooled down somewhat. Adding to the increase on both exchanges was information that inventories continued to decrease sharply. However, the market is still strongly influenced by the positive crop prospects in Brazil, which helped to consolidate global supply. This is the main factor putting pressure on coffee prices in the past week and in the short term.

According to preliminary statistics from CECAFE (Brazilian Coffee Exporters Association), in the first 16 days of August, Brazil exported 400,200 60kg bags of robusta coffee. This is the highest level of robusta exports compared to the same period of previous months. Brazil's push to export robusta coffee has eased concerns about a shortage of supply in the world market.

Meanwhile, Brazil exported more than 1.4 million 60kg bags of Arabica coffee beans, up 26% from the amount shipped abroad in the same period last month. Meanwhile, the total volume of coffee shipped in the first 18 days of August reached more than 2 million bags, up about 500,000 bags compared to the same period last month.

In addition, the USD/Brazil exchange rate increased for the third consecutive week, contributing to boosting the selling demand of Brazilian farmers, thereby putting further pressure on coffee prices.

Domestic coffee prices today, August 22, increased slightly by 100 VND/kg in key purchasing localities. (Source: YouTube)

At the end of the first trading session of the week (August 21) on the international futures exchange, coffee prices increased slightly on both exchanges. Robusta coffee prices on the ICE Futures Europe London exchange for September 2023 delivery increased by 14 USD, trading at 2,558 USD/ton. November delivery increased by 13 USD, trading at 2,366 USD/ton. Average trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange for September 2023 delivery increased slightly by 0.1 cent, trading at 147.55 cents/lb. Meanwhile, the December 2023 delivery period increased by 0.8 cents, trading at 150.80 cents/lb. Trading volume increased sharply in the December delivery period.

Domestic coffee prices today, August 22, increased slightly by 100 VND/kg in key purchasing localities.

Average price	Change
USD/VND exchange rate	23,630	- 30
DAK LAK	64,500	+ 100
LAM DONG	63,800	+ 100
GIA LAI	63,900	+ 100
DAK NONG	64,700	+ 100

Unit: VND/kg.

(Source: Giacaphe.com)

Inventories on the New York and London derivatives exchanges continued to decline sharply. According to HedgePoint Global Market Consulting, in July 2023, the European Union (EU) imported 230,000 bags of Conilon robusta coffee from Brazil without going through 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 a turnover of 110.8 million USD; down 23.3% in volume and 3.5% in value compared to the same period last month. As of mid-August 2023, it is estimated that Vietnam's coffee exports decreased by about 4% compared to the same period.

Accumulated from the beginning of the year to August 15, Vietnam exported a total of 1.54 million tons of coffee, equivalent to a turnover of 2.81 billion USD, down 20% in volume but up nearly 5% in value compared to the same period last year due to high coffee export prices.

According to the Financial Times , it is estimated that by 2050, coffee consumption will double from the current level of 6 billion cups/day.

A study by the Columbia Center for Sustainable Investment also found 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 the crop. Four of the world’s five largest coffee growing countries, including Brazil, Vietnam, Colombia and Indonesia, may have to reduce their acreage.

Source: https://baoquocte.vn/gia-ca-phe-hom-nay-2282023-gia-ca-phe-dieu-chinh-tang-brazil-day-manh-xuat-khau-robusta-nguon-cung-the-gioi-can-tang-them-239197.html