World Coffee Prices Increased Strongly at the Beginning of the Week: Market Welcomes ‘New Wind’, Vietnam’s Exports Could Reach 6 Billion USD

Strong increase in the first session of the week on both London and New York futures exchanges. It is forecast that there is still room for further increases. Domestic coffee prices are currently trading in the price range of 125,000–126,000 VND/kg.

The new breeze makes commodity markets more positive when receiving information that the Fed may reduce interest rates in the near future. Analysts at Citi Research believe that the US Federal Reserve (Fed) will conduct many large interest rate cuts, starting in the next few months and lasting until next summer.

In a note late last week, Citibank’s Research Department forecast that the Fed would cut interest rates eight times in a row, each time by 25 points. The implementation period starts in September 2024 and ends in July 2025.

The coffee harvest progress reported to be fast in Brazil does not appear to have quenched the market’s thirst for buying either type, as it is clear that market prices are still rising post-harvest in Indonesia. April harvest with about 20% output of Colombia (Mitica crop), and now the harvest in Brazil is almost finished with Robusta and more than 50% Arabica.

The market is constantly repeating old information when Volcafe predicted a global Robusta coffee deficit of 4.6 million bags in 2024/25, although smaller than the deficit of 9 million bags. in the 2023–24 season, but this is the fourth consecutive year of a Robusta coffee deficit.

Brazil’s 2024–25 coffee harvest was said to be 58% complete as of July 2, faster than 52% at the same time last year and faster than the five-year average of 54%.

The progress of Brazilian coffee harvesting puts pressure on market prices, especially for Arabica coffee, but has not greatly affected the price of this type of coffee; not only that, but it also tends to increase. . This proves the stability of Arabica coffee in particular and the coffee market in general.

According to the Industry and Trade Information Center, Ministry of Industry and Trade (VITIC), representatives of some large raw coffee exporters in the Central Highlands region said that the amount of goods in stock is currently only enough to sell until June. 2024, which cannot lead to a new harvest. At the same time, it is estimated that coffee output in the 2024–25 crop year will certainly not be equal to the previous crop year.

Although the Central Highlands region, Vietnam’s main coffee-growing region, has entered the rainy season, international investors currently believe that rainfall is still lower than normal levels in previous years, which will negatively impact livelihoods. coffee tree growth. The above information continued to push Robusta up at the beginning of the week.

In the context of Vietnam’s coffee supply shortage, speculators have begun to hoard goods, so coffee prices in the third quarter are expected to continue to increase. In addition, the decrease in coffee supply from major exporting countries in the world due to weather like Brazil will cause coffee prices to tend to increase in the near future.

The Ministry of Agriculture and Rural Development forecasts that in 2024, coffee export turnover will exceed 5 billion USD, possibly even reaching 6 billion USD, the highest level in history. According to the latest report, in the first six months of 2024, Vietnam exported 902,000 tons of coffee, down 10.6% over the same period last year.

However, due to high export coffee prices, the value of coffee exports in the first half of this year reached 3.2 billion USD, an increase of 34.5% compared to the previous year.
with the same period last year. Coffee export prices have increased more than 50% over the same period last year and reached a record high ever, so the value of coffee exports in June 2024 is still up to 300 million USD.

Explaining the decrease in export coffee output, the Ministry of Agriculture and Rural Development said that the recent coffee harvest output decreased sharply, causing the supply for export to decrease.

The Vietnam Coffee and Cocoa Association (Vicofa) said that the amount of coffee exported in July, August, and September is gradually decreasing because the supply is gradually running out. We have to wait until October, when the coffee harvest begins, for Vietnam’s coffee supply to increase again.

It is forecast that Robusta coffee production in the 2024–2025 crop year will only reach 1.3–1.35 million tons, down to 20% compared to the 2023–2024 crop year. However, this number is significantly higher than the previous year. Forecasts were previously made by a number of organizations and industry experts.

Source: KTĐT.vn