The 2023-2024 coffee crop year has ended, with Vietnam exporting 1.46 million tons, a decrease of 12.1%, but the value reached US$5.43 billion, an increase of 33.1% compared to the previous crop year. This is a record high in the history of Vietnam's coffee exports, according to the Vietnam Coffee and Cocoa Association (Vicofa).
Coffee prices today, October 21, 2024
World coffee prices experienced their third consecutive week of sharp declines for robusta, while arabica prices recovered, regaining losses from the previous week. For the week as a whole, November robusta futures fell by $124/tonne, while December arabica futures rose by 5.25 cents/lb. Last week, November robusta futures fell by $241/tonne, and December arabica futures fell by 5.3 cents/lb.
Domestic coffee prices traded on October 20th in the range of 111,100 – 111,700 VND/kg, a further decrease of approximately 1,900 – 2,100 VND/kg this week, after an average loss of 2,500 – 3,000 VND/kg last week. This marks the third consecutive week of decline.
According to World & Vietnam , at the close of trading this weekend (October 18), robusta coffee prices on the ICE Futures Europe London exchange reversed course, with the November 2024 delivery contract increasing by $17 to trade at $4,702/ton. The January 2025 delivery contract also increased by $17 to trade at $4,615/ton. Trading volume was low.
Arabica coffee prices on the ICE Futures US New York exchange rose, with the December 2024 contract increasing by 2.15 cents to trade at 257.30 cents/lb. Meanwhile, the March 2025 contract also increased by 2.15 cents to trade at 256.00 cents/lb. Trading volume was average high.
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| Domestic coffee prices closed last week's trading session (October 19th) up 300 VND/kg in some key purchasing areas. (Source: Coffeeam) |
October marks the beginning of the harvest season for Vietnam, the world's largest producer of robusta coffee, which runs from October 2024 to September 2025. Farmers are hoping for rain to stop around this time to facilitate the harvest; however, several weather reports from Vietnam indicate continuous rain in the Central Highlands this weekend and into next week.
Fundamental factors are also helping to curb the decline in coffee prices, with news indicating limited rainfall is forecast for Brazil next week. This is a crucial time as coffee plants need water to flower in the major coffee-producing state of Minas Gerais.
In the short term, the market is unlikely to return to the historical levels of September, but due to continued high demand and low supply, prices are unlikely to fall below $4,500 per ton.
Domestic coffee prices closed last week's trading session (October 19th) up 300 VND/kg in some key purchasing areas. Unit: VND/kg
(Source: giacaphe.com) |
According to some businesses, although coffee prices are currently high, the industry also faces many challenges, especially drastic weather changes, fierce competition from other crops for economic benefits, and the preparation for implementing EU anti-deforestation regulations…
Vietnam accounts for about 30% of the global supply of robusta coffee, the type primarily used for instant drinks and espresso blends. However, drought, followed by weeks of heavy rain, has severely impacted many growing regions just before the harvest is scheduled to begin in October, according to Bloomberg.
The increasing popularity of instant and takeaway coffee, coupled with limited supply due to weather conditions, has driven robusta coffee prices to double over the past year. Current robusta prices are nearly on par with premium arabica, which has also seen significant price increases recently.
Meanwhile, harsh climatic conditions and shrinking coffee-growing land will reduce harvest yields by approximately 10% to 15% this season. Volcafe Ltd., a major coffee trading company, forecasts that the severe global robusta deficit will continue into the 2024-2025 crop year. If this occurs, it will be the fourth consecutive year of such a deficit.
Coffee acreage in Vietnam is declining as farmers switch to alternative crops such as durian and avocado in recent years. According to a USDA report, decreasing groundwater and shade cover also pose long-term challenges, as many Vietnamese farmers rely on wells for irrigation and forest cover to reduce evaporation.
Currently, although coffee prices have cooled down, domestic coffee prices are still up to 80% higher than the same period last year. At the same time, many forecasts suggest that prices will remain high in the 2024-2025 crop year due to reduced production.
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