Coffee prices return to peak levels, robusta supply causes market concern, hope for sources from Vietnam?

Coffee prices today, November 24, 2024

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

Domestic coffee prices have increased by more than 4,000 VND/kg in the past week, and are being purchased at double the price of last year's harvest. Coffee purchase prices in these provinces are currently at 117,000 VND – 117,500 VND/kg. The new coffee harvest began on November 1st and will continue until the end of the year.

Last week, coffee prices surged, returning to peak levels amid forecasts of reduced supply from Brazil. Both London and New York markets saw their third consecutive week of gains as the U.S. Department of Agriculture 's Foreign Agricultural Service (FAS), which specializes in agricultural seasonal affairs, projected Brazil's 2024/25 coffee production at 66.4 million bags, lower than its previous forecast of 69.9 million bags. The FAS also projected Brazilian coffee inventories at 1.2 million bags at the end of the 2024/25 season in June, a 26% decrease compared to the same period last year.

Similarly, Brazil's crop forecasting agency, Conab, has also cut its production forecast for the 23/24 crop year to 54.8 million bags, down from its May forecast of 58.8 million bags.

Furthermore, the potential shortage of robusta coffee supply has been reaffirmed by a report from the General Department of Vietnam Customs. The recently released report shows that Vietnam's coffee exports in October decreased by 11.6% year-on-year, contributing to the return of robusta prices to the $5,000/ton mark.

Indonesia's total coffee production forecast was also revised downward by the US Department of Agriculture, down 900,000 bags, from 10.90 to 10.00 million bags. The decrease in robusta coffee production, from 9.5 to 8.6 million bags, is the main reason for the overall negative revision of the country's production.

However, losses in the two exporting countries of Brazil and Indonesia are expected to be partially offset by increased coffee production in Colombia. Therefore, these figures will have a limited impact on the market, merely confirming the scenario of tighter global coffee supply in the 2024/25 season.

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

Domestic coffee prices on November 23rd increased sharply by 2,000 VND/kg in some key purchasing areas. (Source: ohman.vn)

According to World & Vietnam , at the close of trading this weekend (November 22nd), robusta coffee prices on the ICE Futures Europe London exchange rose sharply. The January 2025 delivery contract increased by $198, trading at $4,985/ton. The March 2025 delivery contract increased by $191, trading at $4,923/ton. Average trading volume was high.

Arabica coffee prices on the ICE Futures US New York exchange continued to rise, with the December 2024 contract increasing by 6.4 cents to trade at 302.10 cents/lb. Meanwhile, the March 2025 contract rose by 6.45 cents to trade at 299.60 cents/lb. Trading volume was high.

Domestic coffee prices on November 23rd increased sharply by 2,000 VND/kg in some key purchasing areas. 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 places the greatest hope on the figures for Vietnam's harvest, which is currently being collected.

The U.S. Department of Agriculture's June forecast of 29 million bags—including 27.85 million bags of robusta—was considered very optimistic and may be revised downward, as happened with the estimate for the Brazilian crop.

In reality, the odds lean more towards the unfavorable outcome.

Specifically, in the first half of November, Vietnam's coffee exports reached only 20,933 tons, a decrease of 44.8% compared to the same period last year, earning $121.8 million, an increase of 1.8% in value compared to the same period. Cumulatively from the beginning of the year to November 15th, Vietnam has exported 1.17 million tons of coffee with a revenue of $4.7 billion, a decrease of 13.5% in volume but an increase of 38.1% in value compared to the same period.

Some traders have pointed out that a typical Vietnamese robusta crop yields only about 24 million bags. Meanwhile, some Vietnamese traders who buy directly from farmers say that the amount they are currently purchasing is only about one-fifth of what they bought at the same time last season.

According to the Vietnam Coffee and Cocoa Association (Vicofa), Vietnam's coffee production is expected to reach approximately 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