Coffee Prices Still Going Up: The World Market Welcomes New Goods, Surely Earning 5 Billion USD in Exports

They simultaneously dropped sharply in the closing session of last week on Thursday (March 28), due to the international exchange closing on Friday (March 29) during Holy Week and Easter. Speculators are said to have sold off short contracts before the long holiday. However, for the whole week, world prices are still in a good upward trend.

Summarizing the week, the price of Robusta coffee futures for May delivery traded on the London exchange increased by a total of 121 USD. Arabica coffee futures prices for May delivery increased by 4 cents. Domestic coffee prices closed the week in the unprecedented high price range of 98,100–98,700 VND/kg and are still on a straight path to the 100,000 VND/kg mark.

In the last week of March, coffee prices increased to 4,000 VND per kg. Prices have increased, but Vietnamese coffee is running out; there is not much in stock. Information With a large supply shortage from Vietnam, the coffee market is starting to receive new signals from harvest sources in Brazil and Indonesia.

This coffee addition is one of the most important news stories for the global market. In particular, the ability to compensate for new supply from the export activities of these two countries compared to the shortage from Vietnam will be the leading factor determining coffee price movements in the second quarter of 2024.

Mr. Do Ha Nam, Chairman of the Board of Directors and General Director of Intimex Group Joint Stock Company, assessed that in the 2022–2023 crop year and the beginning of this year, Vietnam’s coffee export turnover increased impressively thanks to record high selling prices. green, reaching 100,000 VND/kg.

At the beginning of this year, coffee prices increased sharply, making it difficult for businesses to buy coffee for export. Mr. Nam explained that reality shows that Vietnamese coffee is an irreplaceable product in the European market. ”We tried buying coffee from other countries to make instant coffee but could not get the taste of Vietnamese instant coffee.

The world market does not accept it,” said the Chairman of the Board of Directors and General Director of Intimex Group Joint Stock Company at the seminar “Solutions to Export Coffee to 5 Billion  USD.” Our country currently has about 660,000 hectares of coffee cultivation. Coffee. Of which, specialty coffee only accounts for 2% of the area, and organic coffee accounts for 3% of the area. Vicofa forecasts that the output of the 23/24 crop will decrease by another 10% compared to the previous crop, to about 1.6 million tons (equivalent to 26–27 million 60-kg bags).

Meanwhile, the Ministry of Agriculture and Rural Development on March 26 expected that Vietnam’s coffee output in the 2023–24 crop year could decrease by about 20% to 1,472 million tons, the lowest level in 4 years, due to drought. Meanwhile, from the Brazilian source, the context of coffee production in the 24/25 crop has improved, and there is a high possibility that this country will continue to promote the export of coffee varieties rich in bitter flavor, extending the recent record series.

From the beginning of the 23/24 season (July 2023) to the end of February 2024, Brazil exported about 5 million bags of granular Robusta, an increase of 5 times compared to the same period last year. Currently, Brazil has entered the final months of the crop year, and the monthly export volume of Robusta still maintains 500,000–600,000 bags, a record export volume compared to the same period in previous seasons.

Commenting on the market in the coming days, experts on MXV Commodity Floor said that coffee prices are likely to cool down in the middle of the second quarter but are unlikely to decrease sharply. Market sentiment may be more stable when there is additional supply from Brazil and Indonesia, but the quantity of goods from these two countries is not enough to compensate for the shortage of Vietnamese sources.

It is forecast that world Robusta coffee prices are expected to rise to a record level of 4,000 USD/ton, then there will be a downward adjustment. On the domestic market, green coffee prices will continue to reach levels above 100,000 VND/kg, then cool down according to world prices.

Source: Tincaphe.com