World coffee prices in the short term will be influenced by Vietnam’s supply and exports.

Increases and decreases were mixed in the trading session last week. Robusta coffee prices increased sharply after forecasts of reduced supply. Along with weather information and the USD exchange rate: The latest report of the Foreign Agricultural Service (FAS) under the US Department of Agriculture (USDA) significantly affected coffee prices last week. According to FAS, Brazil’s 2023–24 coffee production decreased slightly by 0.15% compared to the previous forecast.

The FAS report also estimates that Vietnam’s production in the 2023–24 crop year will decrease to 27.8 million bags from an estimated 31.3 million bags in May 2023 because of unfavorable weather due to the El Nino phenomenon caused from the beginning of the case.

FAS also forecasts that the supply of Robusta coffee from the main producing countries in Southeast Asia is likely to decline, prompting funds and speculation to return to the futures market to increase buying. From a historic high of 66,000 VND/kg in October, domestic coffee prices now fluctuate between 57,000 and 60,000 VND/kg.

According to information from experts from the Vietnam commodity exchange, the shortage of containers in Brazil caused longer waiting times for ships at the port and a record heat wave in the country’s main coffee-growing region in the middle of the year. November also pushed prices up.

In addition, a number of macroeconomic policies affecting commodity markets in major importing countries also affect the price movements of this commodity. Experts predict that it is likely that coffee prices will decrease, but the speed depends on many other factors in the market. Around the end of this year and the beginning of next year, the Robusta coffee price graph will be heavily influenced by Vietnam’s coffee supply and exports.

Regarding market characteristics, according to estimates by the General Statistics Office, Vietnam’s coffee exports in the first 10 months of 2023 will reach 1.3 million tons, worth more than 3.3 billion USD, down 9.5% in quantity and 0.2% in value compared to the same period last year. The structure of exported coffee types continues to change positively with a strong increase in processed products (instant coffee, roasted ground, etc.).

Data from the General Department of Customs shows that: By the end of September, processed coffee exports increased by 25.7% (equivalent to 123.7 million USD) compared to the same period last year to 604.8 million USD. The proportion of processed coffee has increased to 19.3% of the country’s total coffee export turnover, compared to 15.5% in the same period.

Previously, Vietnam’s processed coffee exports also grew by 18% in 2022 and reached more than 677 million USD. Overall, from 2014 to present, processed coffee exports have grown on average by more than 15% per year

Source: tincaphe.com