Coffee prices have soared this year due to major supply disruptions from major producers such as Brazil and Vietnam. The cheaper robusta variety, often used in instant coffee, recently hit its highest level since the 1970s.
Coffee price today 11/26/2024
World coffee prices continued to increase sharply right from the opening trading session of the week, at times rising sharply above 300 USD/ton.
Domestic coffee prices increased well in all localities during the peak harvest days, with transactions reaching the threshold of 120,000 VND/kg.
The sudden sharp increase in coffee prices during the harvest season is an unexpected development in the market. Last weekend, the price of Arabica coffee on the New York floor and the Brazilian market both increased, and earlier this week, Robusta coffee on the London floor. However, the continuous price fluctuations have made farmers even more reluctant to sell their coffee, hoping that the price will increase further, and the market will become even more scarce. This situation is not only in Vietnam but also recorded in the largest supplier, Brazil.
On the London exchange, robusta coffee prices at one point soared to $342 per tonne. Meanwhile, the market is increasingly concerned that supplies from Brazil will slow down after a prolonged drought affected coffee trees. This could lead to a decrease in next season's output.
Prices on both world exchanges also rose sharply on concerns that unfavourable weather in Vietnam and Brazil would affect coffee production. “The outlook for the next crop has certainly been affected by the prolonged dry spell that hit the Arabica coffee fields until September,” said Guilherme Morya, an expert at the bank. “Although the rains in October have helped the coffee trees flower very well, there is still a risk that the flowers will not attach to the branches.
The pressure is compounded by strong arabica exports this year, which are likely to reduce ending inventories. According to the US Department of Agriculture’s Foreign Agricultural Service (FAS), Brazil’s coffee inventories could reach just 1.2 million bags at the end of the current crop year, down 26% from a year ago. Meanwhile, FAS also revised its estimate of Brazil’s 2024-25 coffee production to 66.4 million bags, down from the USDA’s previous forecast of 69.9 million bags.
Meanwhile, heavy rains in Costa Rica have triggered a national emergency and destroyed nearly 15% of the Central American country’s annual coffee production, costing growers an estimated $45 million, according to the coffee institute ICAFE. Rains indirectly caused by Hurricane Rafael and Tropical Storm Sara have caused flooding and landslides that could impact coffee growers in a country that exports more than 85% of its arabica crop, known for its high quality.
According to World & Vietnam , at the end of the first trading session of the week (November 25), the price of robusta coffee on the ICE Futures Europe London exchange continued to increase sharply, the delivery term for January 2025 increased by 125 USD, trading at 5,110 USD/ton. The delivery term for March 2025 increased by 113 USD, trading at 5,036 USD/ton. The average trading volume was high.
Arabica coffee prices on the ICE Futures US New York exchange continued to increase, with the December 2024 delivery term up 2.7 cents, trading at 304.80 cents/lb. Meanwhile, the March 2025 delivery term increased 2.65 cents, trading at 302.25 cents/lb. Trading volume was high.
Domestic coffee prices on November 25 increased by 800 - 1,000 VND/kg in some key purchasing localities. Unit: VND/kg
(Source: giacaphe.com) |
Traders said supplies were tightening, with some farmers in Brazil holding back sales for tax reasons and also in hopes of further price gains. They also noted that next year’s arabica crop in Brazil has not been as good as many had expected, with recent rains failing to reverse damage from earlier dry weather.
Traders also noted that speculators have increased their net long positions in both arabica and robusta coffee during the recent rally.
Vietnam is not only the world’s leading exporter of robusta coffee in terms of output, but Vietnamese coffee is also now asserting its position in terms of quality, meeting the strict requirements of many demanding markets in the world. Vietnam is at the peak of its crop season, but although the harvest of the world’s leading robusta producer is progressing well, farmers seem to be in no hurry to sell.
Traders said that unlike previous years, farmers are not under financial pressure because they can make money from durian or pepper. Therefore, harvesting is not as urgent and they are not in a hurry to sell green coffee.
According to data from the Vietnam Coffee and Cocoa Association (Vicofa), Vietnam's coffee exports in the first half of November reached only 20,933 tons of coffee, down 44.8% compared to the same period last year.
Domestic coffee prices in Vietnam have risen due to higher demand and limited supplies, despite the peak harvest season, traders said. Farmers have only harvested about 20% of the crop. The weather is currently sunny and dry, which is favorable for harvesting. At the current pace, farmers will complete the harvest by mid-December, traders said.
Vietnam Commodity Exchange said that coffee exports will increase significantly from December if the harvest goes smoothly.
Source: https://baoquocte.vn/gia-ca-phe-hom-nay-26112024-gia-ca-phe-tang-dung-dung-ngay-dau-tuan-dien-bien-bat-ngo-trong-mua-thu-harvest-gia-con-tang-295034.html
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