Coffee prices rise on supply concerns

As a result, yesterday's trading session saw green dominate all four commodity groups. The MXV-Index closed up more than 0.7% to 2,323 points - the highest level since February.

Closing yesterday's trading session, the industrial raw materials market witnessed overwhelming buying power with 7 out of 9 commodities simultaneously increasing in price. Of which, two coffee commodities continued to be the center of attention when Robusta prices increased sharply by more than 3.3%, reaching 4,585 USD/ton, while Arabica also increased slightly by 0.7%, to 8,163 USD/ton.

According to the Vietnam Commodity Exchange (MXV), concerns about tightening global supply were the factor that pulled coffee prices back up in yesterday's session.

Photo caption — Heavy rains in recent days have disrupted coffee harvesting in the Central Highlands. Photo: VNA

In Vietnam, prolonged heavy rains in recent days have disrupted the coffee harvest in the Central Highlands. According to MXV, adverse weather has caused many areas of coffee to ripen early, increasing the risk of mold growth, threatening the quality of coffee beans in the new crop. The US Department of Agriculture (USDA) previously forecast that Vietnam's coffee output in the 2025-2026 crop could reach about 31 million bags, up nearly 7% over the previous year. However, the current erratic weather conditions have made analysts worry that the actual figure could be much lower than expected.

Meanwhile, in Brazil, the world’s largest coffee exporter, the weather has been moving in the opposite direction. Last week, Minas Gerais state, a key coffee-growing region, recorded an average of just 0.3 mm of rain, less than 1% of the multi-year average. The early dry conditions have raised concerns about the outlook for the 2026-2027 crop.

The international coffee market is also under pressure from the new US tax policy. Washington's imposition of a 50% tax on coffee imported from Brazil has caused many importers to cancel contracts, causing Arabica coffee inventories on the ICE Exchange to fall to an 18-month low, while Robusta fell to a bottom of more than 3 months. Currently, only about a third of the raw coffee source in the US originates from Brazil, making the supply-demand balance in the market even more tense. Domestically, the coffee market is trading slowly. Many purchasing businesses are focusing on finding old goods while the new crop is mainly asking to buy for delivery in December. The price of green coffee beans in the Central Highlands on October 29 increased to 114,000 - 116,000 VND/kg depending on the region; contracts for delivery in December fluctuated around 114,000 - 114,500 VND/kg.

Not outside the general trend of the whole market, the energy group also recorded a positive recovery session when all 5 items in the group simultaneously closed in green. In the context of the world crude oil market in recent sessions continuously witnessing the tug-of-war between concerns about the prolonged oversupply situation and expectations of recovering energy demand in the face of positive signals of international trade. However, the latest report from the US Energy Information Administration (EIA) has become the main driving force to help oil prices reverse and increase again.

According to EIA data released for the week ending October 24, US commercial crude oil reserves fell by nearly 7 million barrels - the largest decline in a month and much higher than analysts' forecasts of just under 1 million barrels. At the same time, the American Petroleum Institute (API) also recorded a decrease of about 4 million barrels in oil inventories, reinforcing expectations that the market will see less pressure on supply.

Not only crude oil, finished oil products in the US also witnessed a sharp decline in inventories. Specifically, distillate fuel inventories also decreased by more than 3 million barrels, while gasoline reserves decreased by nearly 6 million barrels - the sharpest decline since October 2024. Notably, domestic fuel consumption still increased despite the end of the peak tourist season, showing that retail demand for energy in the US remains stable.

These positive signals have helped the oil market break the balance that has lasted for many previous sessions. At the end of trading on October 29, Brent oil price increased by 0.81%, to 64.92 USD/barrel; WTI oil also increased by 0.55%, reaching 60.48 USD/barrel. In addition, in the early morning of October 30 (Vietnam time), the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) announced the latest decision on the base interest rate. Accordingly, the Fed will continue to lower by 0.25 percentage points, down to 3.75 - 4%. This move is part of an effort to support the weakening job market and boost US economic growth, thereby expecting to increase global energy consumption demand.

However, in a press conference after the announcement, Fed Chairman Jerome Powell remained cautious, saying that this could be the last interest rate cut in 2025. He affirmed that the target of bringing inflation back to 2% has not been achieved and policy management needs to be carefully considered in the context of the volatile economy.

The US fiscal situation continues to complicate decision-making. The federal government shutdown, which has lasted nearly a month, has disrupted many important economic data. “What do you do when you’re driving in fog? You slow down,” Powell said, suggesting the Fed may be returning to a wait-and-see mode.

Thus, over the past week, world crude oil prices have continued to record an increase of about 3 - 4%; thereby, creating momentum for the price of finished petroleum products traded on the SGX (Singapore) floor, with an increase of about 5 - 6% for some notable products such as gasoline or diesel.

Investors’ optimism in the face of positive signals from the US-China trade relationship is also contributing to the upward momentum of the energy group. This development may be one of the important factors considered by the Ministry of Industry and Trade and the Ministry of Finance in the domestic retail gasoline price adjustment session taking place this afternoon.

Source: https://baotintuc.vn/thi-truong-tien-te/gia-ca-phe-tang-do-lo-ngai-ve-nguon-cung-20251030102859705.htm