Coffee prices peaked for 10 years, but in the

According to the Vietnam Commodity Exchange (MXV), in the first half of November alone, the price of Arabica coffee for March term on the US ICE Department increased 9.98% to 230 cents/lb, the highest since January 2012 to present.

Meanwhile, the price of Robusta coffee for January term on the EU ICE Department also increased sharply by nearly 6% and at one point exceeded the USD 2,300/ton mark, for the first time since August 2011.

The sharp increase in the price of coffee made the cash flow of domestic investors also attracted to this market. According to the MXV Clearing Center, the average trading value of the two coffee products reached more than 800 billion dong/session in the first two weeks of November, an increase of nearly 15% compared to October. Besides speculative cash flow. , businesses also actively carry out hedging operations when preparing for the most exciting sales period of the year.

Supply problems are the reason for the strong increase in purchasing power and push up the prices of two coffee items, respectively, recently. For Arabica coffee, prices have begun to rise as drought and frost ravage Brazil's coffee crop. In its most recent report, Brazil's National Supply Authority (Conab) cut its estimate for the country's 2021/22 Arabica coffee production to 30.7 million bags (60kg grade), down 8% from the previous year. with the most recent report at the end of May.

Dry weather at the end of last year was the main reason for the drop. Therefore, when the US Hydrometeorological Center (NOAA) forecasts that the La Nina weather pattern will strengthen in the next 3 months, concerns about prolonged drought in South America will affect coffee production. Coffee once again made the buying power increase strongly.

According to the Brazilian Coffee Exporters Association (Cecafé), accumulated in the first 3 months of crop year 2021/22, Brazil's coffee exports reached 8.817 million bags, down 20% compared to the first 3 months of crop year 2020/21. The strong increase in the Brazilian Real in the first half of November also slowed sales of Brazilian farmers, raising concerns about tight supply. The U.S. Green Coffee Association (GCA) said October coffee inventories fell to 5.98 million bags, down -0.8% month-on-month and -2.6% year-on-year. last.

Besides Brazil, the supply in Colombia, the world's second largest Arabica coffee producer, is also not guaranteed. The Colombian Coffee Producers Association has cut its coffee year 2021/22 estimate for the country to 13-13.5 million bags, down from 14 million bags in its previous estimate due to excess rainfall. yield was lower than expected. These news helped Arabica coffee price break resistance and bounce to the highest level in the past 9 years.

For Robusta coffee, the supply is still lower than a year ago. The lack of containers and broken supply chains due to the return of the Covid-19 pandemic have caused coffee exports of Vietnam, the world's largest Robusta coffee producer, to decline.

According to official data from the General Department of Customs, Vietnam exported 99,249 tons of coffee in October, down 1.1% from the previous month. Besides, Vietnam's accumulated exports in the first 10 months of this year are also 4.2% lower than the same period last year.

The situation is even worse when this November, heavy rain in the Central Highlands is hindering the harvest and affecting the quality of coffee beans. This will slow the harvest and the new batch of coffee will not arrive before the end of December this year. The above information has supported and made the price of Robusta climb to a record level within the last 10 years.

Coffee price outlook in the year-end period

In terms of export coffee prices, in 2011 the highest peak was 2,600 USD/ton, currently the price of coffee has only reached 2,350 USD/ton, still 250 USD short to reach the peak in 2011, so the price Coffee is still open to increase.

Consulting firm Fitch Solutions forecasts that coffee prices could remain high through 2022, not only because of a decline in harvests, but also because "demand for coffee, at least in Europe and the US, will increase. increased in the coming months, when the restrictions to combat Covid-19 are lifted, allowing cafes to reopen," said Fitch Solutions. This consulting firm has raised its forecast for the average price of arabica coffee in 2022 from 1.25 USD/pound to 1.5 USD/pound.

While the coffee harvest season of countries in the Southern Hemisphere (Brazil, Colombia...) is usually from May to October, Vietnam harvests coffee from November every year to the end of April next year.

The new harvest in the Central Highlands coffee region has begun, the high price of coffee is making coffee farmers very excited, However, the shortage of workers to increase the harvest is not a small problem. . Coffee growers expect local authorities to soon take measures to support the harvest of the new crop.

Thus, at this time, although Vietnam has begun to harvest coffee, it is in the position of "alone to one market", so success or failure in coffee export at this time is in the initiative of enterprises. For Vietnamese coffee, if you know how to regulate the quantity sold reasonably and you know how to negotiate with partners to achieve the most profitable price contract.

Experts recommend that, taking advantage of the current market with good prices, Vietnamese manufacturers should soon promote the introduction of new crops to the market. Because if later, when the Fed raises interest rates, and at the same time with Brazil's output next year, there may be a season that will push the price of coffee down.

+ OTHER POST:

• Already have 400 thousand tons of oranges, pomelos, pigs and chickens... Warm New Year is coming(16.11.2021)
• Warning: The habit of 'eating out' destroys the opportunity of millions of people(16.11.2021)
• China overtakes the US as the richest country in the world(15.11.2021)
• Export of phones and components exceeded 46 billion USD(15.11.2021)
• Budget revenue increased again(14.11.2021)
• Seafood exports to China are forecast to continue to fall deeply(14.11.2021)