Production problems in Brazil and Asia due to adverse weather conditions have kept supply below demand for three years. If the next harvest in key suppliers Brazil and Vietnam comes in below potential, global supply could fall short of demand again.
Coffee price today 10/20/2024
In the short term, world coffee prices are unlikely to return to the historical level of September, but due to high demand and low supply, prices are unlikely to fall below $4,500/ton.
Domestic coffee prices are trading in the range of 111,100 - 111,700 VND/kg. Although prices have decreased compared to the end of September, current coffee prices are still high. Compared to early October 2023, current coffee prices in the Central Highlands are nearly 2 times higher. This is the first coffee crop year in Vietnam where the price at the beginning of the crop is over 100,000 VND/kg.
According to experts, the price of robusta coffee has been continuously decreasing and is likely to continue to decrease. The new harvest of Vietnam's coffee granary is putting downward pressure on the market, as a large quantity of goods is about to be released to the market.
Coffee exports from Brazil continue to accelerate at the start of the new season. Analysts at Safras & Mercado Group reported that Brazilian coffee growers have sold about 62% of their estimated total production of 66.04 million bags from the current coffee season. The pace of sales is above the reported five-year average of about 60%.
Additionally, the vote in favor of postponing the implementation of the European Union Anti-Deforestation Regulation (EUDR), which was originally set to come into effect at the end of December 2024, will now take effect on December 30, 2025. The EU’s decision to postpone the implementation has come as a relief to the market, with traders no longer having to race to meet the EUDR’s entry into force date.
Meanwhile, geopolitical turmoil is causing investors to withdraw money from the commodity market and pour money into safe havens such as gold – causing the price of precious metals to continuously set new highs.
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| Domestic coffee prices at the close of trading this week (October 19) increased by 300 VND/kg in some key purchasing localities. (Source: aivivu) |
According to World & Vietnam , at the end of this weekend's trading session (October 18), the price of robusta coffee on the ICE Futures Europe London exchange reversed, the November 2024 delivery period increased by 17 USD, trading at 4,702 USD/ton. The January 2025 delivery period increased by 17 USD, trading at 4,615 USD/ton. Trading volume was low.
Arabica coffee prices on the ICE Futures US New York exchange increased, with the December 2024 delivery period increasing by 2.15 cents, trading at 257.30 cents/lb. Meanwhile, the March 2025 delivery period increased by 2.15 cents, trading at 256.00 cents/lb. Trading volume was high on average.
Domestic coffee prices at the close of trading this week (October 19) increased by 300 VND/kg in some key purchasing localities. Unit: VND/kg
(Source: giacaphe.com) |
In general, coffee prices will continue to remain in the high price range due to inventory and production issues due to the impact of adverse weather in the two leading growing countries, Brazil and Vietnam. In fact, looking at the longer term, fundamental information is still contributing to restraining the decline of coffee, from weather issues in growing areas in Brazil to harvesting areas in Vietnam, financial markets, transportation costs, etc.
Overall, the coffee market situation next week is expected to depend heavily on the forecast of sunny and rainy weather in Brazil. Farmers and agronomists in Brazil say the 2025 crop will face problems even if rains help the trees flower well in the coming weeks.
Rain may have come too late for Brazilian coffee, with reports that rainfall is expected to be limited again next week. This is a crucial time as coffee trees need water to flower in the state of Minas Gerais. The extreme dryness in Brazil is expected to continue to keep prices high, as rainfall has been below average since April. The market is hoping for rain during the summer, which is the main flowering season for coffee trees in the country.
Meanwhile, there are many weather reports from Vietnam saying that continuous rain will come to the Central Highlands this weekend and into the new week. This is the time when the world's largest Robusta coffee producer begins harvesting its new coffee crop, which is calculated from October 2024 to September 2025. Traditionally, farmers will expect the rain to stop around this time to facilitate the harvest.
In financial markets, the weak exchange rate between the Brazilian Real and the USD could continue to weigh on local producers' sentiment in the short term.
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