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 July 2024 delivery increased by 73 USD/ton, at 3,892 USD/ton, and for September 2024 delivery increased by 67 USD/ton, at 3,806 USD/ton.

Arabica coffee prices 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 monthly decline for the first time this year, as investors focused on inflation data from the US, Europe and Japan for guidance on the outlook for global interest rates. Unpredictable US economic data has eroded policymakers’ confidence in the outlook for interest rates 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 have 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 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 plenty of good news. Brazil’s harvest from May to July 2024 is forecast to increase by about 13.33%, in addition to the export volume they expect to increase by about 22.22% compared to last year.

Currently, Brazil's Conillon Robusta crop is being harvested, and Brazil's new Arabica crop has begun harvesting in some areas. This year's harvest is slightly faster than last year's. According to Conab, the Brazilian Ministry of Agriculture , Arabica is forecast to increase 8.20% year-on-year to a total of 42.1 million bags, while Robusta production is forecast to increase just 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, reaching 774,716 bags.

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

According to the Vietnam Coffee and 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% compared to the same period in 2023.

Coffee prices started to increase at the end of 2023, during the main crop the price increased by nearly 60,000 VND/kg and now the coffee price has 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