Domestic coffee prices continue to decrease, strong selling pressure, is it forecast that prices will continue to decrease?

Vietnam's coffee output in the 2022/2023 crop year is expected to decrease by 10-15% compared to the 2021/2022 crop year due to unfavorable weather conditions. This has led to a sharp decrease in coffee exports this year. However, thanks to a 10% increase in coffee export prices compared to last year, export value has still increased.

Global coffee prices fell across both exchanges as speculators liquidated their positions. The geopolitical and economic situation in the world put pressure on risk aversion, prompting funds and speculators to liquidate their net positions on both futures markets after two weeks of excessive buying.

Domestic coffee prices fell by 600 VND/kg across the board. After 3 consecutive days of decline, the purchasing price in the provinces lost the threshold of 60,000 VND/kg.

Good rains in Brazil’s coffee-growing regions have further depressed arabica prices. Standard arabica inventories on the New York Mercantile Exchange remained at an 11-month low of 421,424 60kg bags, preventing a sharp decline in arabica prices.

In the world's leading source of robusta - Vietnam, key provinces are entering the coffee harvest season this year. Local authorities are urging organizations and individuals not to harvest green coffee, ensuring that the rate of ripe coffee when picked is over 85% (in the case of late-season harvesting, the minimum rate of ripe coffee is 80%). At the same time, strict measures are being taken against cases of harvesting and trading young coffee; people are being instructed to prepare drying yards and dryers in case of prolonged rain during the harvest period, which affects the quality of the coffee.

Meanwhile, the London Stock Exchange inventory report recorded a continuous addition that contributed to the plunge in Robusta coffee prices. As of October 25, Robusta coffee reserves increased by 580 tons, or 1.60% compared to the previous day, to 36,880 tons (about 614,667 bags, 60 kg bags).

Giá cà phê hôm nay 27/10/2023: Giá cà phê

Domestic coffee prices today, October 27, continued to decrease by 600 VND/kg in some key purchasing localities. (Source: YouTube)

At the end of the trading session on October 26, the price of robusta coffee on the ICE Futures Europe London exchange for November 2023 delivery continued to decrease by 47 USD, trading at 2,420 USD/ton. The January 2024 delivery period decreased by 42 USD, trading at 2,385 USD/ton. Average trading volume.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery decreased by 1.0 cent, trading at 161.20 cents/lb. Meanwhile, the March 2024 delivery price decreased by 51.15 cents, trading at 160.90 cents/lb. Trading volume is high on average.

Domestic coffee prices today, October 27, continued to decrease by 600 VND/kg in some key purchasing localities.

Average price	Change
USD/VND exchange rate	24,390	+ 40
DAK LAK	59,800	- 600
LAM DONG	59,000	- 600
GIA LAI	59,700	- 600
DAK NONG	59,800	- 600

Unit: VND/kg.

(Source: Giacaphe.com)

Currently, in early October 2023, farmers in Vietnam have begun harvesting early-ripening coffee for the 2023/2024 crop year.

This could help increase supply for export activities in the coming time. In the domestic market, recorded on October 25, the price of green coffee beans in the Central Highlands and the Southern provinces was purchased at around 60,100 - 61,000 VND/kg.

The El Nino weather phenomenon is seriously affecting robusta coffee producing countries such as Vietnam and Indonesia.

Robusta accounts for 40% of global coffee production. Arabica beans, considered to be of better quality and higher price, account for 60% and are grown mainly in Latin America. The decline in coffee production will cause coffee prices to continue to rise in 2024 and beyond.

In the 2022-2023 crop year, the average export price of coffee in our country reached 2,451 USD/ton, up 8.2% over the previous crop year. In September alone, the export price of coffee increased for the 7th consecutive month to a new record of 3,310 USD/ton, up 8.4% over the previous month and up 36% (equivalent to 878 USD/ton) over the same period in 2022.

Despite the downward trend in prices, the outlook for the coffee market in the 2023-2024 crop year remains relatively bright. Vietnam, the world’s largest exporter of robusta coffee, is expected to continue to benefit from the shift in demand from higher-priced arabica to cheaper robusta.

Source