Supply from Vietnam's Robusta continues to be scarce, domestic coffee shows no signs of decreasing

At the end of the most recent trading session, the price of Robusta coffee in London for delivery in July 2024 increased by 73 USD/ton, at 3,892 USD/ton, and for delivery in September 2024 increased by 67 USD/ton, at 3,806 USD/ton.

Arabica coffee price for July 2024 delivery increased by 2.6 cents/lb, to 218.25 cents/lb, and for September 2024 delivery increased by 2.55 cents/lb, to 217.35 cents/lb.

Coffee on both exchanges was still closed for trading at the beginning of the week, so the reference price did not change compared to the end of last week. However, the falling USD and the still tense sea freight rates helped domestic coffee prices continue to increase.

Increased by 700 VND/kg, coffee prices will continue to increase

Early morning of May 28 in the US market, the US Dollar Index (DXY) measuring the fluctuations of the greenback against 6 key currencies (EUR, JPY, GBP, CAD, SEK, CHF) decreased by 0.14%, to 104.58.

The dollar officially set a first monthly decline this year, as investors focused on inflation data from the US, Europe and Japan to guide the global interest rate outlook. Unpredictable US economic data has reduced policymakers' confidence in the interest rate outlook in the coming period.

Domestic coffee prices continue to rise, currently trading at 115,500 - 117,000 VND/kg. The falling USD combined with the still tense shipping costs has helped domestic coffee prices continue to rise.

Experts believe that the world coffee price market on online trading floors will continue to increase this week. The current price increase is mainly due to investors' increasing concerns about the supply prospects from Brazil and Vietnam. Currently, hedge funds have increased their net buying position with the forecast that the supply of Robusta from Vietnam will continue to be scarce in the coming time. This will continue to push up domestic coffee prices in Vietnam.

The market has been volatile due to the constant supply updates over the past week. While Vietnam’s supply has been poor, with Robusta production at a 13-year low, Brazil has had some good news. Brazil’s harvest from May to July 2024 is forecast to increase by about 13.33%, in addition to the expected increase in exports of about 22.22% compared to the previous year.

Currently, Brazil’s Conillon Robusta crop is being harvested, and new Brazilian Arabica coffee has begun harvesting in some areas. This year’s harvest is slightly faster than last year’s. According to the Brazilian Ministry of Agriculture ’s Conab forecast, Arabica will increase 8.20% year-on-year to a total of 42.1 million bags, while Robusta production is forecast to increase only 3.30% year-on-year to a total of 16.71 million bags.

Certified graded Arabica coffee stocks held on the New York market are said to have increased by 9,353 bags at the end of last week to reach 774,716 bags.

According to statistics, the current coffee price is 2-3 times higher than the price of coffee in previous years. The record high coffee price has made farmers boldly replant, hoping to get rich from coffee trees.

According to the Vietnam Coffee - Cocoa Association, in the 2022 - 2023 coffee crop, Vietnam will have to import 200,000 tons of coffee due to a shortage of domestic supply. Coffee exports in the first half of May 2024 reached 80,781 tons, down 3.9% over the same period in 2023.

Coffee prices started to increase at the end of 2023, during the main crop season, prices increased by nearly 60,000 VND/kg and now coffee prices have surpassed 100,000 VND/kg, making many growers very excited.

Source: https://congthuong.vn/nguon-cung-tu-robusta-viet-nam-tiep-tuc-khan-hiem-ca-phe-trong-nuoc-chua-co-dau-hieu-giam-322788.html