Early in the morning of October 27 (Vietnam time), on the London floor, the price of Robusta coffee futures for November 2024 delivery was trading at 4,430 USD/ton, compared to 1 month ago (September 28) when the price of coffee was at 5,527 USD/ton, the highest level of all time, the price of coffee has decreased by 1,097 USD/ton. The price of January 2025 delivery was trading at 4,411 USD/ton.
Domestically, coffee prices have also experienced a month of decline. Compared to the highest price of 122,600 VND/kg on September 28, coffee prices have now dropped to 12,600 VND/kg when the highest transaction was at 110,000 VND/kg.
Coffee prices have experienced a month of decline. (Illustration photo)
Explaining the phenomenon of coffee prices continuously falling sharply, the Vietnam Commodity Exchange (MXV) said that the cause comes from the increasing exchange rate difference combined with basic information about crop improvement in Brazil.
In addition, the Dollar Index decreased by 0.36% in yesterday's session, the Brazilian Real decreased more sharply, causing the USD/BRL exchange rate to increase (during the coffee trading time frame). In this context, the market is concerned that Brazilian farmers will increase selling due to earning more foreign currency, thereby creating downward pressure on prices.
According to Somar Meteorologia, rainfall in Minas Gerais, Brazil’s largest coffee-producing state, reached 36.8 mm last week, 15% above the historical average. This has improved growing conditions for crops and raised expectations of a yield recovery for the 2025-2026 crop.
In the domestic market, Vietnamese coffee is entering a new harvest season, so the supply has also improved significantly. This is the main reason for the continuous sharp decline in domestic prices.
Sharing the same opinion about the situation of continuously falling coffee prices, the Coffee - Cocoa Association said that the global coffee industry has experienced many difficulties and challenges due to climate change, which has greatly affected productivity, output and quality. Drought and heat have lasted from the beginning of the season, and storms have lasted until the end of the season.
Political instability, war, local embargoes between Russia and Ukraine, Israel and the Gaza Strip, and many other places in the world with prolonged developments continue to impact the difficulties of the global economy in the medium and long term.
Sharp decrease but double the same period last year
In the domestic market, although it has continuously decreased sharply in the past month, compared to the same period last year, the current coffee price is nearly double from 60,200 - 61,000 VND/kg. Since the beginning of the year, the coffee price has increased by more than 40,000 VND/kg compared to 67,500 - 68,400 VND/kg.
In 2024, the continuous increase in coffee prices will cause difficulties and risks in purchasing and implementing export contracts. For the first time, the price of Robusta coffee on the London exchange is above 5,000 USD/ton, the price of Robusta coffee is even higher than that of Arabica coffee.
In Vietnam, coffee prices have also continuously reached their highest level in the past 30 years. This is the reason why Vietnam's coffee export output decreased by 12.7% in volume but increased by 33% in value compared to the previous crop year.
Coffee prices have increased too quickly while supply is limited, causing disruptions to the supply chain. Exporters cannot deliver goods on time, and partners, buyers, and roasters have reacted negatively. Up to now, coffee prices have cooled down, but the market situation for the upcoming 2024-2025 crop year is still difficult to predict.
Vietnam’s coffee growing regions are currently at risk of being affected by Typhoon Tra Mi. The storm could cause heavy rains across Vietnam’s Robusta coffee growing regions, especially in the northern Central Highlands.
At this point, it is too early to predict the impact on coffee growing areas, but heavy rains are forecast to cause cherries to fall and disrupt ongoing harvesting activities.
"These things can strongly affect coffee production in the coming time. Therefore, although the price has decreased, it is still high compared to the same period of previous years. Therefore, farmers can rest assured to restructure their growing areas to get good income from growing coffee," the expert recommended.
Source: https://vtcnews.vn/nguyen-nhan-gia-ca-phe-giam-hon-1-000-usd-tan-trong-mot-thang-ar904178.html
Comment (0)