Increased in the second session, in which Arabica coffee increased very strongly after the Fed decided to keep interest rates unchanged in the range of 5.25–5.5%/year, and many major central banks in the world also made similar moves—keeping interest rates unchanged, promoting funds and speculation to return to markets to increase buying.
The USDX index’s decline helped most commodity markets regain their green color, with Arabica recovering strongly. Coffee prices also have additional support from Copom, Brazil, which is cutting real interest rates by 0.5% for the third consecutive time to 12.25% per year. ICE’s reported data shows that inventories on both exchanges continue to decline, supporting the bullish market trend.
The dollar fell to a six-week low after data showed the world’s largest economy created fewer jobs than expected last month, bolstering expectations of the US Federal Reserve (Fed). It is possible that interest rates will be kept stable at the upcoming December meeting.
According to the European Statistics Agency, in the first six months of 2023, EU coffee imports from the world reached 9.74 billion EUR (equivalent to 10.3 billion USD), down 4.1% over the same period last year. The trend of reducing imports continued in July 2023; turnover reached 1.57 billion EUR (equivalent to 1.66 billion USD), down 11.1% compared to July 2022.
According to the US International Trade Commission, coffee imports in this market tend to decrease in the first six months of 2023, a decrease of 9.7% compared to the same period last year. This trend continued in July and August, decreasing by 17.3% and 11.2%, respectively, compared to the same period in 2022.
However, the EU and the US have both increased coffee imports from Vietnam. The EU increased imports from Vietnam by 20.1%, with turnover reaching 869 million EUR (equivalent to 917.6 million USD). Vietnam’s coffee market share in the EU’s total import turnover from the world accounted for 8.91% in the first 6 months of 2023 and increased to 9.52% in July 2023.
The US increased coffee imports from Vietnam by 30.3% in the first six months of 2023. The increasing trend continued in July and August, with an increase of 6.8% and 5.1%, respectively, compared with the same period last year. Accordingly, Vietnam’s coffee market share in total US imports from the world increased from 3.51% in the first 8 months of 2022 to 4.89% in the first 8 months of 2023, according to the latest report of the Department of Export and Import (Ministry of Industry and Trade).
However, Vietnamese coffee exporters have been harvesting this year’s new Robusta crop for about a month in early-ripening coffee areas. Weather information about heavy rain at the beginning of the season has affected the harvest progress, raising concerns about supply.