Robusta Coffee Price Breaks Continuous Increase Chain: Domestic Declines, Global Trade Increases Again

Increases and decreases were mixed; Robusta adjusted down after a series of consecutive increases; Arabica increased slightly. Speculators on the London floor in the last session of the month sold strongly to adjust their business positions when they had overbought previously.

Domestic coffee prices decreased compared to yesterday. But after a series of recent increases, it is currently recorded as the highest in Dak Nong at 79,500 VND/kg. For the whole month of January 2024, domestic coffee prices increased to more than 11,000 VND/kg. In December 2023, domestic coffee prices increased by an average of 8,500 VND/kg, right when the harvest was taking place.

Coffee farmers in Vietnam continue to show price resistance. Merchants mainly deliver goods directly to consumer markets without delivering them through the floor. According to Mr. Do Ha Nam, Chairman of the Board of Directors of Intimex Group, the largest exporter of green coffee in Vietnam, in the 2023–2024 crop year, Vietnam’s coffee output is expected to decrease slightly, to about 1.6–1.7 million tons.

Coffee productivity increased in Lam Dong but decreased in many other provinces, such as Gia Lai, Dak Lak, and Dak Nong. The area of coffee-growing areas is continuing to decrease, especially in Dak Lak and Dak Nong. Harvest is later than usual due to rain in the main growing areas.

According to Rabobank, Brazil will export 39.2 million bags of coffee in 2023, which is almost stable (-0.4%) compared to the previous year. But fluctuations in Arabica coffee prices are linked to the climate in Brazil, and ICE-certified inventories are still hovering around 24-year lows.

Meanwhile, although it has rained recently in southern Brazil, the recorded rainfall is still below the historical average. Cecafé said that Conilon coffee prices increased due to increasing domestic and world demand, while Vietnamese farmers continued to show price resistance and problems with the maritime route passing through the Red Sea.

Even though the General Statistics Office of Vietnam forecasts a strong increase in coffee exports in January 2024, it has not contributed to improving ICE’s inventory reporting data. London is currently continuing to fall to the lowest level since 2014 with 2,886 lots (about 481,000 bags, 60 kg bags), according to data reported on January 30.

Observers say that traders mainly deliver goods directly to consumer markets without delivering them through the floor. According to data from the International Coffee Organization (ICO), after decreasing in the previous crop year, the global coffee trade is showing an upward trend again.

Accordingly, global coffee exports reached 10.6 million bags in November 2023, an increase of 4.1% over the same period in 2022. Bringing total exports in the first 2 months of the 2023-2024 crop year (October and November 2023) to 20.2 million bags, an increase of 3.1% compared to the previous crop year.

In terms of proportion, green coffee beans accounted for 92% of total global coffee exports in November, with 9.8 million bags, an increase of 7.6% over the same period in 2022. Overall, in the first 2 months of the 2023 crop year (2024), green coffee exports increased by 3.9% to 18.4 million bags. In particular, Colombian Arabica coffee exports increased by 34% to 1.15 million bags in November.

Mainly due to Colombia, the main exporting country of this coffee group, recording an increase of 35.6%. With this result, Colombian Arabica coffee exports increased by 18.7% in the first 2 months of the 2023–2024 crop year to 2.1 million bags.

In addition, Brazilian Arabica coffee exports increased by 1.6% to 3.6 million bags in November and increased by 4% after the first 2 months of the 2023–2024 crop year, reaching more than 7.3 million bags. Brazil, the main exporter of this coffee group, sold 3.2 million bags in November, an increase of 2.6% over the same period in 2022.

Similarly, Robusta exports increased by 4% to 3.7 million bags in November. This is the largest November export volume ever recorded, exceeding the peak set in November 2022 by Robusta Exports of Brazil, which increased dramatically by 850.2%.

However, total Robusta coffee exports in the first 2 months of the 2023–2024 crop year still decreased by 2.5% compared to the same period of the previous crop year, at 6.2 million bags.In contrast to green coffee, instant coffee exports decreased by 25.4% in November and decreased by 3% in the first two months of the 2023–2024 crop year, to 1.75 million bags.

The proportion of instant coffee in total coffee exports of all types from the beginning of the crop year to now is 8.6%, down from 9.2% in the same period last year. Brazil, the world’s largest exporter of instant coffee, shipped 0.24 million bags to the world market last November. Exports of roasted coffee also decreased by 15.5% in November, and overall, for the first two months of the 2023–2024 crop year, they only reached 0.1 million bags, down from 0.13 million bags in the same period of the previous crop year.

Source: Tincaphe.com