Coffee prices skyrocketed at the end of the week, Vietnam seeks to maintain high export prices

This year's coffee output is forecast to decrease by 10-15%/year due to unfavorable weather. However, Vietnam's coffee exports are receiving good support from high transaction and domestic prices to aim for this year's turnover of over 4 billion USD.

World coffee prices have increased strongly on both international and domestic exchanges. This is not a surprising development, although inventories on the London floor have recently been significantly replenished, mainly from Brazil, after a quality harvest, but concerns about supply shortages still haunt the market.

In the arabica market, the Real rose to a two-week high, discouraging Brazilians from selling coffee for export amid continued deep declines in ICE-New York inventories over the past few months with no sign of any additions.

Meanwhile, the El Nino weather phenomenon is forecast to cause drought in the world's leading coffee-producing countries in the Pacific Rim from October until the end of the first quarter of 2024.

The somewhat stagnant US inflation report and speculation that the Fed will temporarily stop raising interest rates are factors that encourage funds and speculators to return to the buying market after having liquidated heavily in the previous two consecutive weeks, although there are opinions that the coffee futures markets are entering a down cycle. The US Federal Reserve's monetary policy meeting early next week is the interest of the world coffee market in the short and medium term.

Giá cà phê hôm nay 16/9/2023: Giá cà phê

Domestic coffee prices today, September 16, increased sharply by 1,000 VND/kg in some key purchasing localities. (Source: YouTube)

At the end of the weekend trading session (September 15), coffee prices on international exchanges increased sharply. Robusta coffee prices on the ICE Futures Europe London exchange for November 2023 delivery increased by 61 USD, trading at 2,556 USD/ton. The January 2024 delivery increased by 36 USD, trading at 2,404 USD/ton. Average trading volume is high.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery increased sharply by 5.15 cents, trading at 159.15 cents/lb. Meanwhile, the March 2024 delivery price increased by 4.85 cents, trading at 159.75 cents/lb. Trading volume increased sharply.

Domestic coffee prices today, September 16, increased sharply by 1,000 VND/kg in some key purchasing localities.

Average price	Change
USD/VND exchange rate	24,055	+ 10
DAK LAK	67. 600	+ 1,000
LAM DONG	66,900	+ 1,000
GIA LAI	67,400	+ 1,000
DAK NONG	67,900	+ 1,000

Unit: VND/kg.

(Source: Giacaphe.com)

According to statistics from the Ministry of Industry and Trade, Vietnam's coffee exports in August to the two main markets, the US and the EU, decreased sharply - 32.3% and 55% respectively compared to July and decreased 32.6% and 58.9% compared to the same period last year. Meanwhile, coffee to the Indonesian and UK markets increased sharply by 49.3% and 39.3% compared to July and increased 53% and 41.5% compared to the same period last year, according to data from the General Department of Customs.

Specifically, Vietnam's coffee exports to the EU in the first 8 months of the year accounted for 387.9%, with the country's total coffee export volume recording 455.11 thousand tons, down 10.6% over the same period.

On the other hand, coffee exports to China increased by 5.7%, the US increased by 11.1%, South Korea increased by 14.3%, Mexico increased by 45.6%, Algeria increased by 71.4% and especially Indonesia increased by 157.8%.

As one of the world's largest coffee exporters, the decline in coffee exports from Vietnam has been a driving force in pushing up coffee prices. The average export price of Vietnamese coffee in August was estimated at 2,963 USD/ton, up 4.8% compared to July and up 25.8% compared to the same period last year. In the first 8 months, coffee exports reached 2,459 USD/ton, up 8.7% compared to the same period last year. That is good news for coffee exporters and farmers.

To ensure that coffee prices remain high, the Ministry of Agriculture and Rural Development has approved the “Project for Developing Vietnam's Specialty Coffee for the 2021-2030 period” with the goal of reaching a specialty coffee area of 2% of the total area by 2025, meaning an output of 5,000 tons and increasing to 3% and 11,000 tons respectively in 2030.

Many key coffee producing regions are also aiming to develop a sustainable domestic consumption market. Recently, the emergence of many Vietnamese coffee brands and international supply chains from companies in the coffee industry has caused domestic consumption to increase significantly.

Source