Supply shortage continues to push up world coffee prices

Coffee continued to be the focus of the commodity market yesterday (November 5), when Arabica prices surpassed the 9,000 USD/ton mark, approaching the peak set in mid-October. In contrast, cautious sentiment prevailed in the energy market when all 5 commodities decreased in price. At the end of the session, strong buying power in many key commodities helped the MXV-Index increase slightly by 0.2%, to 2,340 points.

Tight supply, global coffee prices continue to "heat up"

At the end of yesterday's trading session, the industrial raw material market recorded relatively mixed developments. Notably, the shortage of supply continued to push up coffee prices. Specifically, Arabica coffee prices increased by more than 2% to 9,118 USD/ton - approaching the highest level in mid-October; while Robusta coffee prices also increased by 0.1% to 4,686 USD/ton.

According to the Vietnam Commodity Exchange (MXV), concerns about supply shortages in Brazil continue to be a key factor supporting coffee prices in the international market. The Brazilian National Supply Agency (Conab) has just announced a forecast that the country's coffee output in the 2025-2026 crop year is estimated to reach only 55.2 million bags, down nearly 2% compared to the previous year. Of which, Robusta output is expected to reach a record 20.1 million bags, but Arabica output, Brazil's main coffee, is expected to decrease by more than 11%, down to below 35.2 million bags. The cause is determined to be due to unfavorable weather conditions and the "biennial" growth cycle of coffee trees, causing productivity after the peak crop to often decline significantly.

*Arabica coffee prices increased more than 2% to 9,118 USD/ton - approaching the peak in mid-October. Illustrative photo*

In addition to production, supply on ICE is also tightening. Arabica inventories are being monitored continuously and are now at a record low of around 22,000 bags.

In key growing regions, production continues to face many obstacles. In Brazil, the heat wave in early October caused flower buds to burn and fall, posing a serious risk to the 2026-2027 crop. In the Central Highlands, heavy rains during the harvest period have significantly delayed progress. Typhoon Kalmaegi, with winds of force 13-14 and gusts of force 17, is forecast to make landfall in the region on November 7, bringing with it very heavy rainfall. Meteorological forecasts show that Gia Lai could receive an additional 212.5 mm of rain, while Dak Lak is expected to receive an additional 139 mm in the next 15 days, making the already high humidity in the growing region even higher.

In the domestic market, coffee trading activities remained quiet, but still recorded stable purchasing power from some warehouses in the Buon Ma Thuot area. Large enterprises continued to purchase regularly, while some warehouses temporarily stood aside or only chose to buy goods from afar.

On November 5, the purchase price of coffee delivered to Buon Ma Thuot fluctuated between 119,000 and 119,500 VND/kg. Units with quality certification were ready to raise the price to 120,000 and 120,500 VND/kg. In Gia Lai, large warehouses focused on purchasing goods delivered to Binh Duong at a price about 1,000 VND/kg higher than the average, along with strict requirements on raw material quality. The purchase price at the warehouse is currently around 120,000 VND/kg delivered to Binh Duong, while goods delivered to Pleiku fluctuated between 119,000 and 119,500 VND/kg depending on the standard.

Supply in Gia Lai is gradually stabilizing as the harvest enters its main phase. It is expected that in the next 2-3 weeks, new supply will be clearer and more even, contributing to improving trading liquidity in the market.

The prospect of oversupply continues to weigh on oil prices.

On the other hand, according to MXV, the energy market yesterday was deep in red. In particular, world oil prices continued to be under downward pressure due to the increasingly obvious prospect of global oversupply, especially after the appearance of the latest report from the US Energy Information Administration (EIA). At the end of the trading session on November 5, WTI oil prices once again fell below the threshold of 60 USD/barrel, recording a decrease of about 1.6% and stopping at 59.6 USD/barrel; while Brent oil prices also returned to the mark of 63.5 USD/barrel, corresponding to a decrease of about 1.3%.

Data reported by the EIA showed that commercial crude oil inventories in the US in the last week of October increased by more than 5 million barrels, the strongest increase since July. The American Petroleum Institute (API) also recorded similar results, estimating that inventories had also reached 6.5 million barrels - much higher than the market's forecast.

“The recovery in imports and the slowdown in refinery activity as refineries conduct scheduled maintenance are supporting the recovery,” said Matt Smith, chief analyst at Kpler. “The US imported an average of 5.9 million barrels of oil per day in the week ending October 31, up nearly 900,000 barrels from the previous week.

The above information further reinforces the prospect of a global oversupply, which has been predicted in advance due to the possibility of increased supply not only from the OPEC+ group but also from American countries, including Canada. In the newly announced budget plan, Ottawa plans to eliminate regulations on emissions in oil and gas exploitation activities, which will likely lead to increased supply from this North American country.

Over the past week, world oil prices have decreased by about 1.5-2%. However, this fluctuation has not been reflected evenly on finished oil product exchanges. At the SGX (Singapore), RON92 and RON95 gasoline prices decreased by nearly 2%, while the oil product group increased by 2.5-3%. This differentiation is expected to directly affect the domestic retail gasoline price management period of the Ministry of Industry and Trade - Ministry of Finance, expected to be announced this afternoon.

Price list of some other goods