World coffee prices increased well on both London and New York exchanges on the closing day of business positions.
Domestic coffee prices skyrocketed compared to yesterday, increasing by 1,700 - 1,800 VND/kg, reaching the historical peak of 84,000 VND/kg.
Supporting factors come from more favorable weather information in Brazil for the new crop and more abundant global coffee supplies as reports of inventory at exchanges have increased steadily recently.
Against this backdrop of falling prices, the International Coffee Organization (ICO) on December 5 projected that global coffee production in 2023/24 would increase by 5.8% year-on-year to 178 million bags due to an exceptional biennial harvest year. The ICO also forecast that global coffee consumption in 2023/24 would increase by 2.2% year-on-year to 177 million bags, resulting in a surplus of 1 million bags of coffee.
According to the 6-month report released on December 21, the USDA's Foreign Agricultural Service (FAS) forecasts that world coffee production in 2023/24 will increase by 4.2% year-on-year to 171.4 million bags, with Arabica production increasing by 10.7% to 97.3 million bags, but Robusta production falling by 3.3% to 74.1 million bags.
Last week, data reporting inventory increases on both exchanges caused coffee futures prices to drop sharply, combined with data showing that Vietnam's coffee exports in January increased sharply by 67.45%, pushing both exchanges to drop in price. However, demand in the domestic Vietnamese market is still very high, causing domestic coffee prices to move in the opposite direction to futures prices in London.
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| Domestic coffee prices at the end of February 7 decreased by 200 - 300 VND/kg in some key purchasing localities. (Source: YouTube) |
According to TG&VN, at the end of the trading session on February 27, the price of robusta coffee on the ICE Futures Europe London exchange increased, the delivery term for May 2024 increased by 57 USD, trading at 3,077 USD/ton. The delivery term for July 2024 increased by 50 USD, trading at 3,014 USD/ton. The average trading volume was low.
Arabica coffee prices on the ICE Futures US New York exchange increased, with the May 2024 delivery period increasing by 3.45 cents, trading at 183.05 cents/lb. Meanwhile, the July 2024 delivery period increased by 2.85 cents, trading at 181.65 cents/lb. Trading volume was high.
Domestic coffee prices today, February 28, increased sharply by 1,700 - 1,900 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Currently, the price of coffee in the domestic market has reached a 30-year historical peak of over 84,000 VND/kg, up 70% over the same period. The supply in the domestic market is lacking, while the demand is still very high, so Vietnam is almost "all alone in the market".
The average export price of coffee reached nearly 3,100 USD/ton, up nearly 43% over the same period.
In the first half of February 2024, Vietnam exported nearly 57,000 tons of coffee, with a turnover of 184.4 million USD. In total, from the beginning of the year to February 15, the amount of coffee exported reached nearly 295,000 tons, with a turnover of 911 million USD.
Compared to the same period last year, the volume of exported coffee increased by only 16.7% but the turnover increased by 66.8%. Accordingly, the average export price of coffee reached nearly 3,100 USD/ton, an increase of nearly 43% compared to the same period last year.
Vietnam’s tight supply of robusta coffee is pushing up prices. Vietnam’s General Department of Customs reported on January 10 that Vietnam’s coffee exports in 2023 will fall 8.7% year-on-year to 1.62 million tonnes. In addition, on November 3, Vietnam’s Ministry of Agriculture forecast that Vietnam’s coffee output in the 2023/24 crop year could fall 10% to 1.656 million tonnes, the smallest crop in four years, due to drought.
With this situation, experts predict that coffee exports could reach 4.5 - 5 billion USD in 2024. This will be a new record year for Vietnam's coffee export turnover.
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