Has the coffee market bottomed out?

At the end of the trading session on October 14, 2024, the world coffee market continued to witness a gloomy trading day. Robusta prices on the London floor traded at 4,427 - 4,828 USD/ton, down from 48 to 86 USD/ton compared to the previous day. At the same time, Arabica coffee prices on the New York floor also decreased by 2.70 - 2.90 cents/lb, showing that downward pressure is increasing in the global market.

Domestically, coffee prices today also decreased by an average of VND400/kg, fluctuating between VND113,000 - 113,700/kg. Although they have decreased compared to the end of September, coffee prices are still high, nearly twice as high as in early October last year.

The decline in domestic and international coffee prices clearly reflects the complex developments in the market, where abundant supply is gradually dominating consumption demand, creating a gloomy picture for the coffee industry.

Brazil, the world’s largest coffee producer, is enjoying a bumper crop. Unseasonal rains have begun to spread across Brazil’s major coffee growing regions, providing moisture and allowing coffee trees to recover and grow better after a long drought. This promises a bigger crop in 2025-2026, further bolstering the outlook for ample supplies.

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

Not only Brazil, coffee export activities in this country are also very active. According to data from the Ministry of Industry and Trade of this country, the export volume of coffee beans in September increased by 36.79% compared to the same period last year, to 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 boost in exports to 987,000 bags, up 17% compared to September 2023.

The strong increase in coffee production in major producing countries, coupled with robust exports, is putting strong downward pressure on prices. Current coffee demand is not enough to absorb the abundant supply, leading to high inventories and pushing coffee prices down.

Vietnam’s coffee market is also not exempt from the downward spiral. The coffee harvest season in Vietnam has started gently, although some areas in the Central Highlands are still experiencing heavy rain. The US Climate Prediction Center has reduced its forecast to only 60% chance of La Niña occurring by the end of the year, down from the previous forecast of 74%.

Vietnam's new coffee harvest is expected to yield a large amount of coffee, and this also contributes to putting downward pressure on prices in the domestic coffee market.

Based on the influencing factors, it is forecasted that coffee prices will continue to be under downward pressure in the coming time. The question is whether coffee prices have bottomed out or not?

Whether coffee prices bottom out or not depends on many factors, including weather conditions, demand, and national policies. Unusual weather changes, such as droughts or unusually heavy rains, can affect coffee production and destabilize the market. Global coffee demand, especially in major markets such as the US and EU, will directly affect prices. Government policies on taxes, quotas, production support, etc. can also impact the coffee market.

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

The coffee market is in a period of strong volatility. The prospect of abundant supply and stable consumption demand has created strong downward pressure on prices. However, coffee prices can recover if the influencing factors change. Coffee growers and traders need to grasp market information to make reasonable 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