Domestic coffee prices suddenly plummeted, China reduced coffee imports from Vietnam

Due to the push to export coffee in 2022, export reserves for 2023 are low. The coffee harvest output in the 2022/2023 crop year is forecast to decrease by 10-15% compared to the 2021/2022 crop year due to unfavorable weather. Therefore, the concern about supply shortage is always present, according to the Ministry of Agriculture and Rural Development .

World coffee prices continued to increase well on both futures exchanges, in the context of the market continuing to be supported by information from the ICE Inventory Report that continued to decrease deeply.

In the first two weeks of October 2023, Brazil exported an average of 13,300 tons of coffee per day, an increase of 26.4% compared to the average for the whole month of October 2022.

However, currently, the supply of Brazil has reduced coffee exports as the local currency Real continues to strengthen against the USD, causing a global shortage. The forecast of El Nino weather phenomenon causing heavy rains during the harvest period is also a concern, and this year's new crop is not easy to buy. Meanwhile, in the long term, investors are quite concerned about the negative impact of El Nino weather phenomenon on coffee producing countries around the Pacific Rim.

New York-traded arabica inventories fell by 2,750 bags to 432,022. London-traded robusta inventories fell by 12,333 bags to 636,167 bags (38,170 tonnes), the lowest since early September.

In the domestic market, coffee prices today suddenly plummeted, down 7,000 - 7,300 VND/kg. Accordingly, the lowest transaction price in the localities was 56,400 VND/kg, recorded in Lam Dong.

Giá cà phê hôm nay 23/7: (Nguồn: YouTube)

Domestic coffee prices today October 19 unexpectedly dropped by 7,000 - 7,300 VND/kg in some key purchasing localities. (Source: YouTube)

At the end of the trading session on October 18, the price of robusta coffee on the ICE Futures Europe London exchange for November 2023 delivery continued to increase slightly by 12 USD, trading at 2,421 USD/ton. The January 2024 delivery period increased by 15 USD, trading at 2,325 USD/ton. Average trading volume.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery increased by 1 cent, trading at 158.05 cents/lb. Meanwhile, the March 2024 delivery price increased by 0.95 cents, trading at 157.65 cents/lb. Trading volume increased.

Robusta coffee traded on the ICE Futures - London exchange opens at 16:00 and closes at 00:30 the following day, Vietnam time. Arabica coffee on the ICE Futures US exchange (New York exchange) opens at 16:15 and closes at 01:30 the following day, Vietnam time.

Domestic coffee prices today October 19 unexpectedly decreased by 7,000 - 7,300 VND/kg in some key purchasing localities.

Average price	Change
USD/VND exchange rate	24,320	+ 22
DAK LAK	57,200	- 7,000
LAM DONG	56,400	- 7,300
GIA LAI	57,000	- 7,000
DAK NONG	57,000	- 7,200

Unit: VND/kg.

(Source: Giacaphe.com)

Concerns that the US Federal Reserve (Fed) will continue to raise interest rates, while long-term US treasury bonds continue to rise, have caused stocks to reverse and decline, the DXY index continues to weaken, and therefore, commodities benefit from speculative capital flows.

Regarding market supply, the International Coffee Organization (ICO) still forecasts a coffee deficit in the new crop year 2023/2024 of 7.26 million bags, even though global output is forecast to increase by 1.70 million bags this crop year.

Regarding the Chinese market, in the first 8 months of the year, the average import price of coffee from the world reached 5,652 USD/ton, down 2.0% compared to the same period last year. Of which, the average import price of coffee from Brazil and Colombia decreased, but from Ethiopia, Vietnam and Malaysia increased.

The structure of coffee supply for China is mainly concentrated from the markets of Brazil, Ethiopia, Vietnam, Colombia, and Malaysia. Of which:

China imported approximately 25,450 tons of coffee from Brazil in the first eight months of the year, worth $98.05 million, up 133% in volume and 120.8% in value over the same period last year. Brazil's share of China's total coffee imports from the world increased from 14.71% in the first eight months of 2022 to 31.82% in the first eight months of this year.

In contrast, China reduced its coffee imports from Vietnam in the first eight months of the year, down 19.1% in volume and 11.4% in value compared to the same period last year, reaching 12,700 tons, worth approximately 30.32 million USD. Vietnam's coffee market share in China's total imports from the world decreased from 21.16% in the first eight months of 2022 to 15.88% in the first eight months of this year.

Source