Robusta coffee prices jump, trading volume increases sharply, Vietnam's new harvest will be at a 4-year low

Vietnam's upcoming coffee harvest is expected to fall by more than 7% to 1.67 million tonnes, the lowest level in four years. This has prompted traders to return to the London futures market to increase buying, according to a Bloomberg survey.

World coffee prices showed mixed movements, with robusta rising sharply while arabica continued to decline slightly. Trading volume increased significantly on both exchanges. Expectations that the US Federal Reserve (Fed) will not change interest rates at its upcoming meeting, combined with supply and demand information, have encouraged investors to increase buying again.

Robusta coffee prices regained the gains from the previous session, while Arabica was hampered by strong selling pressure from Brazilian supply due to the continued high exchange rate of the Brazilian Real. The Brazilian Coffee Exporters Council (Cécafé) reported that coffee exports in August reached 3.673 million bags of all types, a 29.4% increase year-on-year. Of this, Arabica exports increased by 11.2% to 2.65 million bags, and Conilon Robusta exports surged by 443% to 699,000 bags.

However, coffee exports from Vietnam in the first eight months of 2023 decreased by 5.37% compared to the same period last year, even though cumulative exports in the first eleven months of the current 2022/2023 coffee crop year increased by 3.87% compared to the same period of the previous crop year. This further confirms that supply from the leading producer has been depleted, while Vietnam will not have its new crop until the end of December.

Giá cà phê hôm nay 19/3: (Nguồn: Lecafebmt)

Domestic coffee prices today, September 14th, increased by 600-800 VND/kg in some key purchasing areas. (Source: Lecafebmt)

At the close of trading on September 13th, coffee prices showed mixed movements on international exchanges. Robusta coffee prices on the ICE Futures Europe London exchange for the November 2023 delivery contract rose sharply by $49, trading at $2,479 per ton. The January 2024 delivery contract increased by $26, trading at $2,361 per ton. Trading volume also increased significantly.

Arabica coffee prices on the ICE Futures US New York exchange for the December 2023 contract continued to decline slightly by 0.05 cents, trading at 151.95 cents/lb. Meanwhile, the March 2024 contract remained unchanged, trading at 153.15 cents/lb. Trading volume increased sharply.

Domestic coffee prices today, September 14th, increased by 600-800 VND/kg in some key purchasing areas.

Average price	Change
USD/VND exchange rate	23,950	+ 60
DAK LAK	66,300	+ 700
LAM DONG	65,500	+ 600
GIA LAI	66,100	+ 800
DAK NONG	66,500	+ 700

Unit of measurement: VND/kg.

(Source: Giacaphe.com)

The US CPI report for August has reinforced expectations that the Federal Reserve (Fed) will maintain current interest rates without further increases.

The latest report released by the US Department of Labor on September 13th showed that consumer prices in the country rose sharply in August 2023, the biggest increase in over a year, due to higher gasoline prices. However, the modest increase in core inflation may encourage the Fed to keep interest rates unchanged.

Accordingly, the US consumer price index (CPI) rose 0.6% last month compared to July, marking the largest increase since June 2022 and in line with market forecasts.

According to CME Group's FedWatch tool, financial markets largely expect the Fed to keep its policy interest rate unchanged at next week's meeting. Since March 2022, the Fed has raised its benchmark interest rate by 525 basis points to its current range of 5.25%-5.50%. However, the market believes the Fed still has the potential to raise interest rates in November due to persistently high inflation in services (excluding housing).

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