Coffee prices hit rock bottom, domestic demand increases sharply, the important role of the Asian market

In the period 2024 - 2025, Vietnam's domestic coffee consumption will reach 270,000 - 300,000 tons/year. Domestic coffee consumption in the period 2025 - 2030 is forecast to continue to increase and reach an average rate of about 6.6%/year. The increase in domestic demand but low production output will significantly affect the supply of raw materials for export.

Coffee price today 11/4/2024

World coffee prices have been fluctuating continuously over the past week, but the total fluctuations of the whole week are still down sharply. Robusta has had its 5th consecutive week of strong decline. Arabica is at its lowest level in the last 2 months.

Domestic coffee prices lost an average of VND3,500/kg last week, compared to only VND1,000/kg last week.

For the week, the price of Robusta coffee futures for January 2025 delivery decreased by 132 USD/ton. The price of Arabica coffee futures for December delivery decreased by 5.45 cents/lb. Last week, the price of Robusta coffee futures for November delivery decreased by 272 USD/ton. The price of Arabica coffee futures for December delivery decreased by 8.9 cents/lb.

Strong shipments of conilon robusta from Brazil are putting pressure on export prices. In addition, good weather with recent rains will help the Brazilian coffee crop recover after a prolonged dry period that pushed arabica further down. Another factor that has contributed to the sharp decline in coffee prices is the weakening of the Brazilian currency, with the Real falling to its lowest level in nearly three months against the US dollar.

Vietnam's coffee output for the 2024-2025 crop year is forecast to be around 1.6 million tons. There are many different forecasts for Vietnam's coffee output (the world's second largest coffee producer). According to the USDA report, Vietnam's coffee output for the 2024-2025 crop year is expected to be around 29 million bags, of which 24.4 million bags will be exported and 4.6 million bags will be consumed domestically. Some other forecasts suggest that in the 2024-2025 crop year, Vietnam's coffee output will be around 1.6 million tons (26-27 million bags).

Meanwhile, the strong increase in domestic demand but low production output will significantly affect the supply of raw materials for export. Last crop year, Vietnam exported 1.45 million tons of coffee and brought in a turnover of 5.4 billion USD. In contrast, Vietnam also imported a record high of nearly 140,000 tons of coffee, an increase of 36% compared to the previous crop year and a value of 527 million USD, an increase of 76%.

Domestic coffee prices at the end of last week's session (November 2) dropped sharply by 1,200 - 1,300 VND/kg in some key purchasing localities. (Source: Coffeeam)

According to the World & Vietnam , at the end of the trading session last weekend (November 1), the price of robusta coffee on the ICE Futures Europe London exchange continued to decrease, the delivery period in January 2025 decreased by 90 USD, trading at 4,279 USD/ton. The delivery period in March 2025 decreased by 73 USD, trading at 4,208 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange decreased, with the December 2024 delivery period falling 2.95 cents, trading at 242.95 cents/lb. Meanwhile, the March 2025 delivery period fell 3.1 cents, trading at 242.4 cents/lb. Trading volume was high.

Domestic coffee prices at the end of last week's session (November 2) dropped sharply by 1,200 - 1,300 VND/kg in some key purchasing localities. Unit: VND/kg

Average price	Medium
USD/VND exchange rate	25,084	+ 20
DAK LAK	106,500	- 1,200
LAM DONG	106,000	- 1,300
GIA LAI	106,400	- 1,200
DAK NONG	106,500	- 1,200

(Source: giacaphe.com)

According to the Vietnam Coffee and Cocoa Association (Vicofa), the average export price of Vietnam's coffee in the 2023-2024 crop year is 3,792 USD/ton.

In the top 10 markets importing the most coffee from Vietnam, there are 5 countries in the European region. Notably, the price in these markets is lower than 4,000 USD, while in 4 Asian countries it is above 4,000 USD/ton.

All five European countries, Germany, Italy, Spain, Russia and the Netherlands, have average import prices below $4,000 per ton. Germany is the largest importer of Vietnamese coffee in the world with 179,000 tons, worth $607 million and an average price of $3,392 per ton. Italy is the second largest importer of coffee with $416 million but the lowest average price is only $3,262 per ton. Spain is the country with the highest price for Vietnamese coffee in Europe with $3,915 per ton, an output of 105,000 tons and a value of $412 million.

In contrast, emerging Asian markets are the leading importers of Vietnamese coffee. In particular, the Philippines imported 61,000 tons of coffee worth up to 270 million USD, with an average unit price of 4,424 USD/ton. In the top 10 main markets (by volume), the Philippines ranked 7th but was the country importing Vietnamese coffee with the highest price. In 8th place, China imported nearly 54,000 tons, worth 225 million USD with a unit price of 4,166 USD/ton, and Indonesia imported 53,000 tons, worth 222 million USD, with a unit price of 4,197 USD/ton.

Even in the Japanese market, the largest importer of Vietnamese coffee in Asia and the third largest in the world, the average price is higher than in European countries. Japan imported 107,000 tons of coffee with a value of 413 million USD and an average price of 3,866 USD/ton.

According to experts, the main reason is that European countries mainly buy green coffee beans for processing and use in the production of instant coffee. Meanwhile, Asian countries, in addition to green coffee beans, also import processed products and instant coffee. This is a group of value-added products, helping the total value of turnover and average selling price to increase higher than in the European region.

Source: https://baoquocte.vn/gia-ca-phe-hom-nay-4112024-gia-ca-phe-ve-day-nhu-cau-noi-dia-tang-manh-vai-tro-quan-trong-cua-thi-truong-chau-a-292502.html