Record High Domestic Coffee Prices: Benefiting and Continuing to Set Peaks

Commenting on coffee this week, expert Nguyen Quang Binh said that the USD is recovering, and the selling force of new crops before Vietnam’s Lunar New Year will affect the increase. On the contrary, concerns about low supply and continued transportation disruptions will be the driving force behind helping coffee grow.

At the end of last week’s session, Robusta coffee futures prices in London continued to adjust as funds and speculators took short-term profits. DXY continues to increase as speculative capital flows choose to be a short-term refuge.

Meanwhile, coffee futures prices in New York dropped again, predicting that the main coffee-growing regions in Southeast Brazil are about to receive a very significant amount of rain. This will provide good support for the bumper year’s Arabica crop, according to the upcoming “two-year” cycle.

In the 2023–2024 crop year, Brazil’s coffee production is forecast to increase by 3.7 million bags to 66.3 million bags. Mainly due to Arabica coffee output increasing by 5.1 million bags to 44.9 million bags. Arabica coffee trees in many Brazilian production regions continue to recover after the severe frost, high temperatures, and below-average rainfall that occurred in 2021 caused coffee production to decrease in the 2021–2022 crop year and 2022–2023.

However, Brazil’s Arabica coffee output is still significantly lower than the peak of nearly 50 million bags in previous crop years. Increased production in key Arabica coffee-producing countries such as Brazil, Colombia, and Ethiopia is expected to offset the decline in Indonesia, one of the main Robusta-producing countries in Southeast Asia.

According to the Vietnam Coffee and Cocoa Association, in the 2023–24 crop year, Vietnam’s coffee output is expected to decrease to 1.6–1.7 million tons, lower than 1.78 million tons in the 2022 crop year. 2023. “ In 2024, there will be a lot of conflicting information affecting global coffee prices.

In the first quarter of 2024, Robusta and Arabica coffee prices will remain high due to concerns about supply shortages and the lowest inventory in the past 12 years,” said the Import-Export Department. “Europe can almost only rely on Vietnam to buy Robusta coffee. Therefore, it is likely that coffee prices in Vietnam will continue to increase in 2024, even the highest in the world,” Mr. Nam said. more.

Commenting on world supply, the US Department of Agriculture (USDA) forecasts that in the 2023–2024 crop year, global Robusta coffee production will decrease for the second consecutive year to 74.1 million bags compared to 76.6 million bags. of the previous crop year, which is the lowest level in the last 4 crop years.

This is not very positive information for roasters, especially importers in Europe. The reason is because roasted, ground, and instant coffee (mainly made from Robusta coffee) is popular with consumers around the world due to the global economic decline and rising living costs, causing demand for consumption. Coffee at home increased.

This is also the reason why Vietnam’s processed coffee exports (roasted and ground coffee and instant coffee) increased very strongly in 2023. Data from the Import-Export Department shows that, by the end of November 2023, Vietnam’s processed coffee export turnover increased by 27.2% over the same period in 2022 to a record of 776.5 million USD, accounting for a 21.4% proportion.

Meanwhile, Robusta and Arabica green coffee exports decreased by 2.4% and 37.3%, respectively, to 2.7 billion USD and 145.4 million USD. This number is expected to increase in the near future as investment activities in the coffee processing sector have been promoted in recent years.


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