Coffee prices hit their lowest at the end of the week, Vietnamese coffee benefits from EVFTA

In 2022, Vietnam's coffee export turnover reached 4 billion USD, an increase of 32% compared to 2021. In the first 9 months of 2023, this item helped Vietnam earn nearly 3.13 billion USD, a slight increase of 0.7% over the same period last year.

World coffee prices continued to fall sharply at the end of the week. Coffee futures prices continued to fall to the lowest level of the week after prolonged liquidation pressure on both markets. A slight increase in the USDX index also contributed to the price decline. Domestic coffee prices fell for the fourth consecutive session. In the last trading session of the week, the market fell another VND500/kg, trading at VND58,700 - VND59,500/kg in key coffee growing regions.

At the end of the trading session last week (October 27), the price of robusta coffee on the ICE Futures Europe London exchange for delivery in January 2024 continued to decrease by 37 USD, trading at 2,383 USD/ton. The delivery in March 2024 decreased by 30 USD, trading at 2,355 USD/ton. Average trading volume.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery decreased by 0.25 cents, trading at 160.95 cents/lb. Meanwhile, the March 2024 delivery price decreased by 0.4 cents, trading at 160.50 cents/lb. Trading volume is high on average.

Giá cà phê hôm nay 29/10/2023: Giá cà phê

Domestic coffee prices fell by VND500/kg in some key purchasing locations during the trading session this weekend (October 28). (Source: atticacoffee)

Inflation data in the US is still higher than the Fed's target, making Wall Street investors worry that the Fed will be more hawkish at its monetary policy meeting in the middle of next week. The European Central Bank (ECB) has just decided to keep its current interest rate unchanged (4-4.5%/year). The market also reacted negatively to the conflict in the Middle East, which increased risk appetite.

In Vietnam, localities have begun harvesting early-ripening coffee for the 2023/2024 crop year. This could help increase supply for export activities in the coming time.

Weather reports in the main coffee growing regions of southeastern Brazil have shown abundant rains, which are good for the new crop of coffee. Coffee prices in the domestic market in Brazil are mixed. The sharp fall in the real exchange rate is also discouraging Brazilians from increasing their coffee exports.

A report from ICE New York showing inventories falling to a one-year low helped keep futures from falling further. A report from ICE London on October 26 showing robusta coffee stocks rising to 39,760 tonnes (about 626,667 bags, 60 kg), a two-week high, helped push futures to a third straight correction.

Domestic coffee prices decreased by 500 VND/kg in some key purchasing localities in this weekend's trading session (October 28).

Average price	Change
USD/VND exchange rate	24,360	- 30
DAK LAK	59,500	- 500
LAM DONG	58,700	- 500
GIA LAI	59,400	- 500
DAK NONG	59,500	- 500

Unit: VND/kg.

(Source: Giacaphe.com)

Thanks to the opportunities brought by the Vietnam - European Union Free Trade Agreement (EVFTA), coffee exports to the European Union (EU) market account for the largest proportion with nearly 40% of total exports in 2022, reaching 1.49 billion USD, an increase of about 45% in value compared to 2021.

In the first 9 months of 2023, Vietnam's coffee exports are estimated at 1.266 million tons, worth 3.16 billion USD, down 7.3% in volume but up 1.9% in value over the same period last year.

According to experts, when EVFTA is implemented, taxes on roasted and ground coffee, instant coffee and other coffee products will be reduced to 0%, creating conditions to increase the value of Vietnamese coffee, thereby creating conditions for domestic and foreign enterprises to invest in processing plants to increase the added value of coffee.

According to the Department of Industry and Trade of Dak Lak province, when participating in EVFTA, all 27 member countries recognized the protection of geographical indications for local coffee. When implementing the agreement, businesses have taken advantage of exporting instant coffee and the export value has increased.

Source