Global coffee prices maintained mixed trends at the end of the week. Market concerns about rising risks and Wall Street investors speculated that the US Federal Reserve (Fed) will take strong action again at the upcoming monetary policy meeting.
Regarding coffee supplies from Brazil, Pine Agronegocios, a Brazilian agricultural commodities brokerage, has just updated its forecast for 2023/2024 production to increase by 1.47% to 55.16 million bags, including 34.87 million bags of Arabica coffee and 20.29 million bags of Conilon robusta coffee. Pine Agronegocios also predicts that Brazil's exports in 2023/2024 will reach 35.19 million bags and domestic consumption will remain stable at 21 million bags.
Robusta demand remains strong for the instant coffee industry and pressure from Brazil’s newly harvested arabica crop continues to weigh on sentiment in the New York futures market. A sustained rise in the real has helped Brazilians increase their coffee exports.
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| Domestic coffee prices increased by 300 VND/kg in some key purchasing localities in the last session of this week (May 27). (Source: Freepik) |
At the end of the weekend trading session (May 26) on the international floor, the price of robusta coffee on the ICE Futures Europe London floor turned to increase. The price of robusta coffee futures for delivery in July 2023 increased by 21 USD, trading at 2,574 USD/ton. The price of delivery in September increased by 20 USD, trading at 2,528 USD/ton. Trading volume was below average.
Arabica coffee prices on the ICE Futures US New York exchange continued to fall. The July 2023 delivery contract fell 1.1 cents, trading at 181.6 cents/lb. Meanwhile, the September 2023 delivery contract fell 1.1 cents, to 179.55 cents/lb. Trading volume increased sharply.
Domestic coffee prices increased by 300 VND/kg in some key purchasing localities in the last session of this week (May 27).
Unit: VND/kg. (Source: Giacaphe.com) |
Over the past 5 months, domestic coffee prices have continuously set new records. This increase has even been considered “unimaginable” by businesses in the industry because it is so fast.
According to data from the Vietnam Coffee and Cocoa Association (VICOFA), Vietnam's robusta coffee output in the 2022-2023 crop year is estimated to decrease by 10-15% compared to the previous crop year to about 1.5 million tons due to the impact of unfavorable weather and the wave of crop conversion to fruit trees, especially durian, avocado and passion fruit.
The new crop arrived in early October last year, but harvesting and drying were slow due to heavy, continuous rain during this period. The quality of the grain may also be affected.
According to the General Department of Customs, in the first 7 months of the 2022-2023 crop year (from October 2022 to April 2023), Vietnam exported 1.12 million tons. Domestic consumption is about 250,000 tons. Therefore, the current inventory of people is about 100,000 tons. Adding 100,000 tons of inventory from the 2021-2022 crop year, the remaining quantity is only about 200,000 tons. Meanwhile, the world's average monthly import demand for Vietnamese robusta coffee is 100,000 tons, and Vietnam still has 5 months to go before the new crop year. Therefore, the shortage of supply will continue in the coming time.
Figures from the General Department of Customs also show that coffee exports in April fell 22% compared to March to 163,000 tons. According to analysts, this is a sign of a shortage. Last year, there was a shortage in August, but this year, the shortage began in March. When the price reached its old peak of VND52,000/kg at the beginning of the year, people sold a lot of coffee.
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