With inventories at low levels, Robusta coffee prices are leading the upward trend.

According to the Vietnam Commodity Exchange (MXV), at the close of trading on February 29, the prices of both coffee commodities improved, recovering what had been lost in the previous session. Robusta led the increase with a 1.68% rise. Weak export figures from Indonesia, along with low inventory levels at the ICE exchange, were factors driving the increase in coffee prices.

According to Indonesian government data, Sumatra Robusta coffee exports in January 2024 reached 3,192 tons, a 79% decrease compared to the same period last year. Furthermore, concerns about supply shortages remain, as Robusta inventories at the ICE-EU exchange saw a slight decrease of 10 tons on February 28th, bringing the total certified coffee volume at the exchange down to 24,530 tons.

Robusta prices led the gains with a 1.68% increase, while Arabica prices regained upward momentum.

Arabica prices recovered 1.43% below technical support, despite improved certified coffee inventory data from the ICE-US exchange. Specifically, at the close of trading on February 28th, the amount of certified coffee on the ICE exchange increased sharply by nearly 9,000 bags, bringing the total certified coffee there to 342,766 bags. Furthermore, the amount of coffee awaiting sorting remained high at nearly 148,750 bags, a large surplus for inventory to continue expanding in subsequent sessions.

The International Coffee Organization (ICO) forecasts global coffee production for the 2023/24 season to increase by 5.8% year-on-year to 178 million bags due to a biennial exceptional harvest year, while global coffee consumption during the same period will increase by 2.2% year-on-year to 177 million bags, resulting in a surplus of 1 million bags of coffee.

In its six-month report released on December 21, the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA) projected that world coffee production in 2023/24 will increase 4.2% year-on-year to 171.4 million bags, with Arabica production rising 10.7% to 97.3 million bags and Robusta production falling 3.3% to 74.1 million bags.

According to FAS forecasts, ending stocks for the 2023/24 crop year will decrease by 4.0% to 26.5 million bags from 27.6 million bags in the 2022-23 crop year. Brazil's Arabica coffee production for the 2023/24 crop year will increase by 12.8% year-on-year to 44.9 million bags due to higher yields and increased planted area. However, Robusta coffee supply from Vietnam is scarce.

According to preliminary statistics from the General Statistics Office, coffee exports in February 2024 reached 160,000 tons, a decrease of 32.8% compared to the previous month and a decrease of 20.1% compared to the same period in 2023; export value reached 524 million USD, a decrease of 27.9% compared to the previous month, but an increase of 20.3% compared to the same period in 2023.

In the first two months of 2024, cumulative coffee exports are estimated at 398,000 tons, an increase of 16.2% compared to the same period in 2023; export value reached 1.25 billion USD, an increase of 67.5%.

The average export price of coffee in February 2024 increased for the second consecutive month and reached its highest level in the past four months, estimated at US$3,276 per ton, up 7.4% from the previous month and up 50.6% from the same period in 2023.

In the first two months of 2024, the average export price of coffee reached US$3,140 per ton, an increase of 44.1% compared to the same period in 2023.

In the first two months of 2024, the average export price of coffee reached US$3,140 per ton, an increase of 44.1% compared to the same period in 2023.

According to Mr. Le Duc Huy, General Director of Simexco DakLak in the Central Highlands, the area planted with coffee has shrunk due to people switching to durian cultivation. However, thanks to still high yields, this year's coffee production is the same as last year's. The problem, however, is that this year's quantity is insufficient to compensate for last year's shortfall, leading to a shortage occurring earlier, starting as early as February.

Meanwhile, according to the International Coffee Organization (ICO), traders in Vietnam are still holding onto coffee beans in anticipation of higher prices, which further exacerbates supply problems.

Mr. Trinh Duc Minh, Chairman of the Buon Ma Thuot Coffee Association, believes that this crop year has a severe supply-demand imbalance, causing price fluctuations. Major coffee-producing countries such as Brazil, Vietnam, Indonesia, and India have all been affected by crop failures, with production decreasing by about 10-15%.

Expert Nguyen Quang Binh commented that coffee prices rose again as US inflation data was released as expected by the market. Prices in the US continued to rise in January 2024, but at the lowest rate in nearly three years, reinforcing speculation about the possibility of the Federal Reserve (Fed) cutting interest rates in June.

Source: https://congthuong.vn/ton-kho-ve-muc-thap-gia-ca-phe-robusta-dan-dau-da-tang-306147.html