Coffee prices increased sharply at the end of the week, exports reached a very high price in many years

Vietnam's coffee exports in the first 15 days of October reached only 17,838 tons, down 27% compared to the first half of September and 55% compared to the same period in 2022. However, during this period, the average export price of coffee reached 2,512 USD/ton, up 10.1% over the same period last year, according to a report by the General Department of Customs.

World coffee prices on futures exchanges increased sharply in the last sessions of the week due to a number of factors, including financial support that stimulated funds and speculators to return to increase purchases with very large trading volumes; Inventory reports managed and issued by ICE exchanges continued to decline sharply.

Supply shortages in Southeast Asia and a lack of shipments to Brazil’s export ports due to transport issues have also supported the price increase. Exporters are reporting delays in coffee shipments in Brazil due to a lack of trucks and containers, while waiting times for shipments have also increased, according to Reuters . In the robusta market, continued sluggish exports from Vietnam, while concerns about the new crop being affected by bad weather are providing a double whammy for prices.

The new moves by Fed officials show that they are very cautious about future interest rate decisions. The coffee futures market is a highly liquid financial derivatives market (along with gold and crude oil), so it is very sensitive, in addition to the intrinsic fundamental factors of the dominant commodity. The increase in the Real also contributes to the increase in coffee prices.

Arabica stocks fell to 421,614 bags, an 11-1/2-month low. Robusta stocks fell 1,180 tonnes to 26,280 tonnes (604,667 bags), a six-week low.

Giá cà phê hôm nay 27/2: chịu tác động tiêu cực. (Nguồn: Broadcastcoffee)

Domestic coffee prices at the end of this week's session (October 21) continued to increase sharply by 1,400 - 1,500 VND/kg in some key purchasing localities. (Source: Broadcastcoffee)

At the end of this week's trading session on October 21, the price of robusta coffee on the ICE Futures Europe London exchange for November 2023 delivery was 80 USD, trading at 2,577 USD/ton. The January 2024 delivery increased by 77 USD, trading at 2,479 USD/ton. Trading volume was very high.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery increased by 1.3 cents, trading at 165.25 cents/lb. Meanwhile, the March 2024 delivery price increased by 2.6 cents, trading at 164.40 cents/lb. Trading volume increased very high.

Domestic coffee prices at the end of this week's session (October 21) continued to increase sharply by 1,400 - 1,500 VND/kg in some key purchasing localities.

Average price	Change
USD/VND exchange rate	24,330	- 40
DAK LAK	59,900	+ 1,500
LAM DONG	59,100	+ 1,500
GIA LAI	59,600	+ 1,400
DAK NONG	59,700	+ 1,500

Unit: VND/kg.

(Source: Giacaphe.com)

The market is speculating that the Fed will definitely stop raising interest rates until the end of this year and maintain the high interest rate cycle. This has caused the DXY index to change, the yield of long-term US Treasury bonds to decrease along with the volatility of expired options, in the context of increased risk aversion due to the war in the Middle East, and a massive flow of speculative money into the commodity markets in general.

Although the harvest season has begun, Vietnam's coffee harvest has been severely affected by the weather. Latest data from the General Department of Customs shows that coffee exports in the first 15 days of October reached only 17,838 tons, down 27% compared to the first half of September and 55% compared to the same period in 2022.

Despite the sharp decline in export volume, thanks to price support due to the rising trend worldwide, the average export price of Vietnamese coffee in the first half of October 2023 still increased by 7.6% compared to the average of September 2023 and increased by 39.5% compared to the same period last year. As of mid-October, the average export price of coffee reached 2,512 USD/ton, up 10.1% compared to the same period last year. This is a very high price in many years.

The sharp increase in export prices has supported coffee prices in the domestic market. On the last day of this week (October 21), the price of green coffee beans in the Central Highlands and the Southern provinces recovered strongly to around VND1,400 - 1,500. Currently, domestic coffee is purchased at around VND59,100 - 59,900/kg. Although this is not the highest price compared to the end of September and the beginning of October, it is still a fairly high price for Vietnamese coffee.

Source