Coffee prices continue to increase sharply, supply is very worrying, what is happening in the market?

After the domestic coffee price adjustment session, the real market in Vietnam has almost no more price chaos, mainly due to the amount of goods needed to buy to cover and pay off debts between local traders before the new crop.

World coffee prices have risen sharply in a row after the ICE inventory report continued to fall sharply. Arabica coffee inventories fell to 421,614 bags, an 11-and-a-half month low. Robusta coffee fell 1,180 tons to 26,280 tons (equivalent to 604,667 bags), a 6-week low.

At the end of this week's trading session on October 21, the price of robusta coffee on the ICE Futures Europe London exchange for November 2023 delivery was 80 USD, trading at 2,577 USD/ton. The January 2024 delivery increased by 77 USD, trading at 2,479 USD/ton. The average trading volume was high.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery increased by 1.3 cents, trading at 165.25 cents/lb. Meanwhile, the March 2024 delivery price increased by 2.6 cents, trading at 164.40 cents/lb. Trading volume increased very high.

Robusta coffee traded on the ICE Futures - London exchange opens at 16:00 and closes at 00:30 the following day, Vietnam time. Arabica coffee on the ICE Futures US exchange (New York exchange) opens at 16:15 and closes at 01:30 the following day, Vietnam time.

Giá cà phê hôm nay 23/7: (Nguồn: YouTube)

Domestic coffee prices today, October 21, continued to increase sharply by 1,400 - 1,500 VND/kg in some key purchasing localities. (Source: YouTube)

The domestic coffee market is recovering, recording two consecutive sessions of high growth after a sharp decline, losing 7,000 VND/kg due to delivery after the first announcement date (FND). By the morning of October 20, it had recovered, increasing 1,000 VND/kg compared to the same time on October 19. Today's coffee price, October 21, the domestic coffee market continued to increase by an average of 1,500 VND/kg.

Domestic coffee prices today, October 21, continued to increase sharply by 1,400 - 1,500 VND/kg in some key purchasing localities.

Average price	Change
USD/VND exchange rate	24,330	- 40
DAK LAK	59,900	+ 1,500
LAM DONG	59,100	+ 1,500
GIA LAI	59,600	+ 1,400
DAK NONG	59,700	+ 1,500

Unit: VND/kg.

(Source: Giacaphe.com)

The market is very concerned about the supply from Vietnam. Because according to tradition, coffee from Vietnam must increase sales strongly from the end of September, to prepare for the new crop. But so far, transactions have been quite quiet because the key coffee regions are experiencing continuous rain.

This has led to widespread concerns about medium-term supply. Currently, the Central Highlands coffee region is experiencing widespread heavy rains, hindering the new robusta harvest that has just begun. This is also a concern for the world coffee market because the supply of this “bitter” coffee is still tight.

Vietnam is the world's second largest coffee exporter, and the number one exporter of robusta. Robusta prices have also increased sharply due to Indonesia raising its policy interest rate to 6%, which could block the country's coffee exports next year.

Meanwhile, Brazilians have sold 56% of their expected crop so far, slightly below the multi-year average of 59%. Of that, Arabica sales account for 52% of the crop, compared with 58% sold last year, and Conilon sales account for 62% of the crop, compared with 64% sold last year, according to Safras & Mercados.

Meanwhile, information from the world's leading producer of high-quality wet-processed Arabica coffee - Colombia. After three consecutive seasons of decline due to adverse weather, Colombia's output is expected to reach around 11.6 - 12 million bags this year due to improved weather. FNC hopes to soon reach its target of 14 million bags/year after expanding its planting area.

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