Coffee prices return to peak, robusta supply makes the market worried, hope from Vietnamese sources?

Coffee price today 11/24/2024

World coffee prices increased sharply last week, with robusta coffee prices soaring to nearly $5,000 per ton and arabica hitting a new record.

Domestic coffee prices have increased by more than VND4,000/kg in the past week, and are being purchased at double the price of last year’s crop. Coffee purchase prices in these provinces are currently at VND117,000 – VND117,500/kg. The new coffee harvest began on November 1 and will continue until the end of the year.

Coffee prices surged last week, returning to their peaks amid forecasts of lower supplies from Brazil. Both London and New York markets posted their third consecutive weekly gains as the US Department of Agriculture ’s Foreign Agricultural Service (FAS) forecast Brazil’s 2024/25 coffee production at 66.4 million bags, down from its previous forecast of 69.9 million bags. FAS also forecast Brazil’s coffee inventories at 1.2 million bags at the end of the 2024/25 season in June, down 26% from a year earlier.

Also in line with the downgrade, Brazil's crop forecasting agency Conab has also cut its production forecast for the 23/24 crop to 54.8 million bags from its May forecast of 58.8 million bags.

In addition, the possible shortage of robusta supply was also confirmed by a report from the General Department of Vietnam Customs. The recently released report showed that Vietnam's coffee exports in October decreased by 11.6% compared to the same period last year, contributing to the return of robusta prices to the $5,000/ton mark.

Indonesia’s total coffee production was also revised down by 900,000 bags from 10.90 to 10.00 million bags by the USDA. The decline in robusta production, down from 9.5 to 8.6 million bags, was the main reason for the country’s overall negative adjustment.

However, losses in Brazil and Indonesia are expected to be partially offset by increased production in Colombia, so these figures will have a limited impact on the market and only serve to confirm a scenario of tighter global coffee supplies in the 2024/25 crop year.

Climate issues continue to pose a global threat, harming coffee production in all major producing countries.

Domestic coffee prices on November 23 increased sharply by VND2,000/kg in some key purchasing localities. (Source: ohman.vn)

According to World & Vietnam , at the end of this weekend's trading session (November 22), the price of robusta coffee on the ICE Futures Europe London exchange increased sharply, with the delivery term for January 2025 increasing by 198 USD, trading at 4,985 USD/ton. The delivery term for March 2025 increased by 191 USD, trading at 4,923 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 period up 6.4 cents, trading at 302.10 cents/lb. Meanwhile, the March 2025 delivery period increased 6.45 cents, trading at 299.60 cents/lb. Trading volume was high.

Domestic coffee prices on November 23 increased sharply by VND 2,000/kg in some key purchasing localities. Unit: VND/kg

Average price	Medium
USD/VND exchange rate	25,175	+ 5
DAK LAK	117,500	+ 2,000
LAM DONG	117,000	+ 2,000
GIA LAI	117,400	+ 2,000
DAK NONG	117,500	+ 2,000

(Source: giacaphe.com)

The current situation puts the greatest hope on Vietnam's crop numbers, which are currently being harvested.

The USDA's June forecast of 29 million bags—of which 27.85 million are robusta—is considered very optimistic and will likely be revised downward, as happened with the estimate for Brazil's crop.

In fact, the odds are more in favor of the negative case.

Specifically, in the first half of November, Vietnam's coffee exports reached only 20,933 tons, down 44.8% year-on-year, earning 121.8 million USD, up 1.8% in value over the same period. Accumulated from the beginning of the year to November 15, Vietnam exported 1.17 million tons of coffee with a turnover of 4.7 billion USD, down 13.5% in volume but up 38.1% in value over the same period.

Some traders have pointed to a Vietnamese robusta crop of only about 24 million bags. Meanwhile, some Vietnamese traders who buy directly from farmers say their current purchases are only about one-fifth of the amount they bought at the same time last season.

According to the Vietnam Coffee and Cocoa Association (Vicofa), Vietnam's coffee output is expected to reach about 26 to 27 million bags in the 2024-2025 crop year, including 24 to 25 million bags of robusta.

Source: https://baoquocte.vn/gia-ca-phe-hom-nay-24112024-gia-ca-phe-tro-lai-muc-dinh-cung-robusta-khien-thi-truong-lo-lang-hy-vong-tu-nguon-viet-nam-294861.html