Coffee Prices Are Rising Sharply: Concerns About Price Fall and Global Supply Shortage Forecast?

Simultaneously returning to a positive trend, Robusta coffee prices increased by more than 2% to 2,422 USD/ton as funds and speculation in the market tended to return to increase buying, while ICO still maintained its forecast of a supply shortage.

The prominent impact on the commodity market, including coffee products, at this time is the decision to maintain the current interest rates of major central banks in the world. This caused DXY to fall again, helping most emerging currencies regain value, stimulating speculation, and commodity funds returning to increased buying. In particular, the real value of the world’s leading supplier, Brazil, increased sharply.

Declining ICE inventory reports on both exchanges also contributed to supporting the upward price trend. In particular, standard inventory on the New York floor is the lowest in the past 20 years, causing Arabica coffee prices to increase sharply.

The International Coffee Organization (ICO) reported that global coffee exports in September only totaled 8.61 million bags, down 13.36% over the same period last year. This has contributed to cumulative global coffee exports in the 2022–23 coffee crop reaching a total of 122.99 million bags, down more than 5.60% compared to the previous crop year.

Meanwhile, according to analysis by the Department of Macroeconomic Analysis of the Department of Indirect Tax Administration of Bosnia and Herzegovina, the price of this popular coffee beverage will continue to increase in the near future. Due to disruptions in the world market and rising raw material prices, coffee prices are expected to increase further in the near future.

The analysis shows that huge coffee stocks in Brazil and Vietnam, as the largest producers, are falling and could halve by the end of this year compared to last year, which will have a further impact on rising global coffee prices. This analysis adds that in the recent period, coffee prices on the stock market have increased significantly, and raw material prices will certainly not decrease.

However, in the short term, the market still has concerns that threaten the decline of coffee this week. There is favorable weather in Brazil, new crop pressure from Vietnam, and importantly, the two exchanges are in the overbought zone after three consecutive days of increases since last weekend.

In the country at this time, farmers in the Central Highlands provinces are starting to harvest coffee in the 2023–2024 crop year. Coffee prices are fluctuating by nearly 60,000 VND per kg of green coffee, nearly 1.5 times higher than the same period last year (2022). This makes farmers excited, hoping for a good coffee harvest and good prices. This year’s high coffee prices have made farmers excited, making efforts to stick to their farms and have a source of reinvestment.

According to preliminary statistics, Vietnam’s coffee exports in October 2023 reached 60,000 tons, up 17.7% compared to September 2023 but down 29.7% compared to the same period in 2022. Accumulated May 10 In 2023, Vietnam’s coffee exports will reach 1,313 million tons, down 9.5% over the same period. Turnover reached 3.32 billion USD, down 0.2%.

Source: Tincaphe.com