Domestic coffee prices go in reverse, prolonged decline, "trap" on the trading floor?

Coffee prices are falling sharply and for a long time, which could signal many challenges for the new crop year. The entire coffee industry had a trade surplus of 4.9 billion USD, but imports were also at an all-time high, according to Vicofa.

Coffee price today 10/25/2024

World coffee prices have fallen sharply. The downward trend shows no signs of stopping.

Domestic coffee prices today, October 25, dropped sharply. Domestic coffee prices 'went back' to the 100,000 VND/kg mark, currently trading in the range of 108,400 - 108,800 VND/kg.

Coffee prices continued to fall sharply at the end of the most recent session, falling to three digits, making the current price even further away from the historical milestones recorded last September. Currently, coffee prices on the two international exchanges have continuously decreased and are approaching the level of 4,000 USD/ton. In addition to supply and demand reasons, the current price decrease is believed to be due to the fact that the above investors have had their contracts liquidated by the market to prepare for a new term.

According to experts, at the beginning of the trading session, coffee prices increased rapidly, making the market lively and also creating a "trap" for small investors on the floor. At the end of the session, speculators dumped their stocks strongly to liquidate, pushing both floors down deeply.

Currently, many coffee gardens in Vietnam are starting to ripen and people are harvesting. This is one of the factors causing the market to continue to decrease in price because Vietnam is the world's largest supplier of robusta coffee. Although at present, coffee prices are still high at over 100,000 VND/kg, the prolonged decline has also made many people worried about the refrain "every harvest season, prices decrease".

Favorable weather in Brazil has also contributed to the price drop. According to Somar Meteorologia, rainfall in Minas Gerais, Brazil’s largest coffee-producing state, reached 36.8 mm last week, 15% above the historical average. This has improved growing conditions for crops and raised expectations of a recovery in yields for the 2025-2026 crop.

In addition, although the Dollar Index decreased, the Brazilian Real decreased more sharply, causing the USD/BRL exchange rate to increase. In this context, the market is concerned that Brazilian farmers will increase sales due to earning more foreign currency, thereby creating downward pressure on prices.

However, in the long term, farmers and analysts still predict that Brazil's coffee harvest in 2025 will continue to decline compared to this year due to late rains that prevent the crop from fully recovering.

Domestic coffee prices today, October 25, decreased by 1,200 VND/kg in some key purchasing localities. (Source: YouTube)

According to World & Vietnam , at the end of the trading session on October 24, Robusta coffee prices on the ICE Futures Europe London exchange decreased simultaneously, with the November 2024 delivery period decreasing by 114 USD, trading at 4,368 USD/ton. The January 2025 delivery period decreased by 106 USD, trading at 4,337 USD/ton. The average trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange fell sharply, with the December 2024 delivery term down 6.9 cents, trading at 245.45 cents/lb. Meanwhile, the March 2025 delivery term fell 6.6 cents, trading at 244.45 cents/lb. Trading volume was high on average.

Domestic coffee prices today, October 25, decreased by VND 1,200/kg in some key purchasing localities. Unit: VND/kg

Average price	Medium
USD/VND exchange rate	25,203	0
DAK LAK	108,600	- 1,200
LAM DONG	108,400	- 1,200
GIA LAI	108,600	- 1,200
DAK NONG	108,800	- 1,200

(Source: giacaphe.com)

The Vietnam Coffee and Cocoa Association (Vicofa) held a summary of the 2023-2024 crop year. This is a year of record exports of 5.43 billion USD. In recent days, coffee prices have been falling sharply, signaling many challenges for the new crop year.

Last year, coffee exports reached a record value of 5.4 billion USD. However, on the other hand, imports were also at an all-time high of 139,000 tons, worth nearly 527 million USD; an increase of about 36% in volume and nearly 76% in value over the same period last year. The entire coffee industry had a trade surplus of 4.9 billion USD.

According to estimates by the Ministry of Agriculture and Rural Development, harsh climate conditions and increasingly narrowing coffee growing areas will reduce the country's harvest output by about 10% to 15% in the 2023-2024 crop year to about 1.5 million tons.

The drought has caused the trees to produce fewer and smaller beans. In addition, the rain will prevent farmers from harvesting and drying the coffee, and it will also make transportation more difficult.

According to the US Department of Agriculture (USDA), more than 95% of Vietnam’s coffee output in the coming season will be robusta. The growing popularity of instant and take-away coffee, combined with limited supplies due to weather, has caused robusta prices to double over the past year. The current price of robusta is almost equal to that of premium arabica, which has also increased sharply in recent times.

Volcafe Ltd., a major coffee trader, forecasts a severe global robusta deficit in the 2024-25 crop year, which would be the fourth consecutive year of such a deficit.

Coffee growing areas in Vietnam have been declining as farmers have switched to alternative crops such as durian and avocado in recent years.

Declining groundwater and shade also pose long-term challenges, as many Vietnamese farmers rely on wells for irrigation and forest cover to reduce evaporation, according to a USDA report. Vietnam’s robusta coffee production is forecast to fall 1% in 2024-25 to 27.85 million 60-kg bags, but that is about 9% lower than in 2021-22, suggesting a long-term decline in production that coincides with strong global demand.

Source: https://baoquocte.vn/gia-ca-phe-hom-nay-25102024-gia-ca-phe-trong-nuoc-di-nguoc-da-giam-keo-dai-cai-bay-tren-san-giao-dich-291287.html