World coffee prices fluctuated on international and domestic exchanges. Robusta coffee prices on the London exchange recovered, while domestic transactions decreased. Arabica coffee prices turned slightly lower, after many consecutive sessions of increase.
This is the first increase of the London floor since the beginning of the new year 2024.
Coffee markets have been following the commodity markets on uncertainty, while supply concerns in Asia have supported the upward trend, while the focus of the global coffee market at the moment remains on weather conditions in Brazil and the development of the new 2024/2025 crop.
Weather information Brazil has had rain, in addition to the report of increased global coffee exports in November by the International Coffee Organization (ICO).
Data reported by the ICE Report Center shows that inventories on both exchanges have not recorded any significant improvements, with Arabica still at a 24-year low and Robusta not receiving any additional supply from Asia.
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| Domestic coffee prices today, January 5, continued to decrease by 500 VND/kg in some key purchasing localities. (Source: YouTube) |
At the end of the trading session on January 4, the price of robusta coffee on the ICE Futures Europe London exchange increased, the delivery term for March 2024 increased by 31 USD, trading at 2,786 USD/ton. The delivery term for May 2024 increased by 27 USD, trading at 2,741 USD/ton. Trading volume was low.
Arabica coffee prices on the ICE Futures US New York exchange decreased slightly, with the March 2024 delivery period decreasing by 0.7 cents, trading at 185.55 cents/lb. Meanwhile, the May 2024 delivery period decreased by 0.6 cents, trading at 183.50 cents/lb. Average trading volume was low.
Domestic coffee prices today, January 5, continued to decrease by 500 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Global commodity markets continue to fluctuate amid uncertainty over whether the US Federal Reserve will begin its interest rate cut cycle following a weaker-than-expected US jobs report and crude oil prices trending higher amid tensions over the Hamas-Israel war.
In the last days of 2023, coffee prices returned to the old record of 70,000 VND/kg. Prices increased even during harvest time - a rare occurrence. In the whole year of 2023, coffee prices increased by 70%.
The heat continues to spread into 2024 when prices remain around 68,000 - 69,000 VND/kg. According to export enterprises, people hoarding goods even during the harvest season contributes to the scarcity of supply, pushing up domestic prices. Many export enterprises cannot buy goods for future contracts.
Although Vietnam has entered the peak coffee harvest season of 2023/2024, the situation of scarce supply still occurs while demand is quite large. Information about the estimated shortage of about 1.5 - 2.5 million bags of coffee under contract and need to be met from the current coffee harvest appeared late last year, causing coffee prices to skyrocket.
The heat continues to spread into 2024 when prices remain high. According to exporters, people hoarding goods even during the harvest season makes supply even scarcer. Many exporters cannot buy goods for future contracts.
According to the report of the Vietnam Coffee - Cocoa Association (Vicofa), the coffee output in the 2023 - 2024 crop year (from October 2023 to September 2024) is expected to decrease by 10% compared to the previous crop year to about 1.6 million tons due to the impact of climate change, increased intercropping area, and farmers investing in crops with high economic efficiency such as durian and fruit trees. If in the 2022 - 2023 crop year, the inventory carried over from the previous crop was about 160,000 tons, this year, this number is less than half, about 58,000 tons.
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