Coffee prices fell across the board at the end of the week, weather will "support" Brazil's supply

Weakening coffee prices were expected as futures markets entered a downtrend during the transition period between crop years with pressure from the upcoming harvest of many major producing countries in the world market.

World coffee prices fell in the closing session of this week on September 22. Notably, while robusta coffee prices only slightly decreased, arabica prices plummeted. The reason is that the Agricultural Supply and Forecasting Company (Conab), under the Brazilian Ministry of Agriculture (Conab), adjusted its forecast for Brazil's arabica coffee harvest to increase by 38.2 million bags, 0.3 million bags higher than the previous forecast.

The harvest season is now complete, and the pressure to sell new crops is increasing. The real exchange rate is getting weaker, as the US dollar continues to rise after the US Federal Reserve (Fed) maintained a tough tone, even though it kept interest rates unchanged this time, encouraging people to sell their exports.

Arabica coffee prices continued to fall after forecasts of good rains in Brazil to support the new crop of coffee, helping to ease concerns about the upcoming El Nino weather phenomenon.

Coffee prices in the domestic market in Vietnam are currently high but it is very difficult to buy because the supply has been exhausted, only a very significant amount is in the hands of FDI enterprises with extremely high price differences.

Giá cà phê hôm nay 25/6/2023: Giá cà phê. (nguồn: dallas.culturemap)

Domestic coffee prices decreased slightly by 100 - 200 VND/kg in some key purchasing localities, during the weekend trading session (September 23). (source: dallas.culturemap)

At the end of this weekend's trading session (September 22), coffee prices on international exchanges decreased slightly. Robusta coffee prices on the ICE Futures Europe London exchange for November 2023 delivery decreased by 3 USD, trading at 2,461 USD/ton. The January 2024 delivery decreased by 9 USD, trading at 2,369 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery decreased by 3.7 cents, trading at 151.15 cents/lb. Meanwhile, the March 2024 delivery price decreased by 3.8 cents, trading at 152.25 cents/lb. Trading volume is high on average.

Domestic coffee prices decreased slightly by 100 - 200 VND/kg in some key purchasing localities, during the weekend trading session (September 23).

Average price	Change
USD/VND exchange rate	24,190	- 20
DAK LAK	66,600	- 200
LAM DONG	66,100	- 100
GIA LAI	66,400	- 200
DAK NONG	66,800	- 200

Unit: VND/kg.

(Source: Giacaphe.com)

Domestic coffee prices have fluctuated over the past month, increasing and decreasing alternately every week. This week, domestic coffee prices ended the week with the fourth consecutive decline.

According to the Import-Export Department (Ministry of Industry and Trade), in the first 8 months of 2023, Vietnam's robusta coffee exports to the Japanese market had a double-digit growth rate compared to the same period last year.

The proportion of robusta coffee in Vietnam's total coffee export turnover to the Japanese market increased from 66.51% in the first 8 months of 2022 to 69.1% in the first 8 months of 2023.

Similarly, the proportion of processed coffee exports also increased from 23.13% in the first 8 months of 2022 to 24.57%. In contrast, the proportion of Arabica coffee exports to Japan decreased from 10.36% in the first 8 months of 2022 to 6.34% in the first 8 months of 2023.

According to statistics from the International Trade Center (ITC), Vietnam was the largest coffee supplier to Japan in the first 7 months of 2023, with a volume of over 65 thousand tons, worth 152.5 million USD, down 8.2% in volume and 3.6% in value compared to the same period in 2022. However, Vietnam's coffee market share in Japan's total imports increased from 27.65% in the first 7 months of 2022 to 31.38% in the first 7 months of 2023.

Source