World coffee prices have just experienced a sharp increase; in the past week, robusta prices rose by $141 (4.51%), while arabica prices increased by 8.70 cents (4.70%) for March delivery.
Domestic coffee prices continue their upward trend, currently trading in the range of 76,500 - 77,100 VND/kg as supply shortages continue to drive up domestic coffee prices.
At the close of trading last week (January 27), robusta coffee prices on the ICE Futures Europe London exchange rose, with the March 2024 contract increasing by $18 to trade at $3,269 per ton. The May 2024 contract increased by $27 to trade at $3,112 per ton. Trading volume was average and low.
Arabica coffee prices on the ICE Futures US New York exchange rose sharply, with the March 2024 contract increasing by 6.9 cents to trade at 193.85 cents/lb. Meanwhile, the May 2024 contract saw a 5.75 cent increase, trading at 189.45 cents/lb. Trading volume was average high.
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| Domestic coffee prices increased by 400-500 VND/kg in some key purchasing areas last weekend (January 28). (Source: https://doanhnhan.biz/) |
Thus, robusta coffee prices are setting a new record every week. In less than a month into 2024, the London exchange has already seen a 13% increase.
Data released by the Brazilian Coffee Exporters Association (CECAFE) shows that Brazil's green coffee exports in the first five months of the 2023-2024 crop year (July to November 2023) increased by 18.7% compared to the same period of the 2022-2023 crop year, reaching 17.3 million bags. Of this, robusta exports surged by 420.9% to 3.4 million bags, while arabica exports remained unchanged at 13.97 million bags.
Robusta coffee stocks certified and tracked by the London exchange increased by 70 tons, or a slight 0.23% increase compared to the previous week, as of January 26th, registering at 30,080 tons (approximately 501,333 bags, 60 kg bags), a 15-year low, mainly consisting of Brazilian Conilon coffee.
Domestic coffee prices increased by 400-500 VND/kg in some key purchasing areas last weekend (January 28).
Unit of measurement: VND/kg. (Source: Giacaphe.com) |
According to expert analysis, the price of coffee from Vietnam is rising due to congestion on shipping routes to Europe via the Suez and Panama canals. The need to detour or delays drives up shipping costs, which in turn drives up the price of coffee.
The delays also resulted in significantly low inventories in Europe. Therefore, even though the London market was consistently in overbought territory, prices continued to rise steadily.
Domestically, the coffee shortage is due to a deficit from the previous season. Some production shortfalls mean that exports can only take place in the new season. Additionally, exporters fear a repeat of last year's shortages, so they are stockpiling more goods. This has contributed to the recent increase in coffee prices.
Meanwhile, in the 2023-2024 crop year, Brazil's coffee production is projected to increase by 3.7 million bags to 66.3 million bags. This is mainly due to a 5.1 million bag increase in arabica coffee production, bringing it to 44.9 million bags.
Arabica coffee plants in many of Brazil's producing regions continue to recover after severe frosts, high temperatures, and below-average rainfall in 2021, which resulted in reduced coffee yields in the 2021-2022 and 2022-2023 crop years.
Nevertheless, Brazil's arabica coffee production remains significantly lower than the peak of nearly 50 million bags in previous bumper seasons. Conversely, Brazil's robusta coffee production is projected to decline for the first time after six consecutive years of growth, falling by 1.4 million bags to 21.4 million bags.
Brazil, the world's largest coffee exporter, is forecast to recover and increase by 7.3 million bags year-on-year to 39.5 million bags, driven by higher supply and increased import demand from the US and EU.
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