Has the coffee market hit bottom?

At the close of trading on October 14, 2024, the global coffee market continued to experience a sluggish day. Robusta prices on the London exchange traded at $4,427 - $4,828 per ton, down $48 to $86 per ton from the previous day. At the same time, Arabica coffee prices on the New York exchange also fell by 2.70 - 2.90 cents per pound, indicating increasing downward pressure on the global market.

Domestically, coffee prices today also decreased by an average of 400 VND/kg, fluctuating between 113,000 and 113,700 VND/kg. Although lower than at the end of September, coffee prices are still high, nearly twice as high as at the beginning of October last year.

The decline in coffee prices both domestically and internationally clearly reflects the complex developments in the market, where abundant supply is gradually overshadowing consumer demand, creating a bleak picture for the coffee industry.

Brazil, the world's largest coffee producer, is experiencing a bumper crop. Unseasonal rains have begun to spread across Brazil's main coffee-growing regions, replenishing moisture and allowing coffee plants to recover and thrive after a long period of drought. This promises an even more bountiful harvest in the 2025-2026 season, further reinforcing the prospect of abundant supply.

Coffee price forecast for tomorrow, October 15, 2024: Will the coffee market hit bottom?

Not only Brazil, but coffee exports from other countries are also booming. According to data from the country's Ministry of Industry and Trade , green coffee exports in September increased by 36.79% compared to the same period last year, reaching 4.05 million 60kg bags. According to CECAFE, Brazil's coffee exports in September 2024 even set a new record with 4.46 million bags, an increase of 33.3%.

Colombia, the world's third-largest producer of Arabica coffee, also recorded a sharp 26% increase in September production to 1.07 million bags, contributing to a surge in exports to 987,000 bags, up 17% compared to September 2023.

The sharp increase in coffee production in major producing countries, coupled with robust export activity, is creating strong downward pressure on the market. Current coffee consumption demand is insufficient to absorb the abundant supply, leading to high inventories and driving coffee prices down.

The Vietnamese coffee market is also caught in the downward price spiral. The coffee harvest in Vietnam has started gently, although some areas in the Central Highlands are still experiencing heavy rain. The US Climate Prediction Center has lowered its forecast to only 60% chance of La Niña occurring later this year, down from its previous forecast of 74%.

Vietnam's recent coffee harvest is expected to yield a large quantity of coffee, which is also contributing to downward pressure on domestic coffee prices.

Based on the influencing factors, the forecast for coffee prices in the near future is that they will continue to face downward pressure. The question is whether coffee prices will hit bottom.

Whether coffee prices hit rock bottom depends on many factors, including weather conditions, consumer demand, and national policies. Unusual weather patterns, such as droughts or unusually heavy rainfall, can affect coffee production and destabilize the market. Global coffee consumption, especially in major markets like the US and EU, will directly impact prices. Government policies on taxes, quotas, and production support can also affect the coffee market.

Given the current market developments, coffee growers and traders need to closely monitor market trends and consider appropriate business strategies. Farmers should consider selling coffee in smaller batches to minimize price risks. Coffee businesses should seek to diversify their markets and explore new potential markets.

The coffee market is currently experiencing significant volatility. The prospect of abundant supply and stable demand has created strong downward pressure on prices. However, coffee prices could recover if the influencing factors change. Coffee growers and traders need to stay informed about market trends to make sound and effective business decisions.

Source: https://congthuong.vn/du-bao-gia-ca-phe-ngay-mai-15102024-lieu-thi-truong-ca-phe-co-cham-day-352421.html