According to the Vietnam Commodity Exchange (MXV), closing the trading day at the beginning of the week (November 6), the coffee market continues to be a bright spot attracting the attention of investors. Arabica prices extended their upward momentum for the third consecutive day, closing 1.64% higher than reference. Robusta price also increased sharply by more than 2% yesterday. Coffee inventories on the Intercontinental Exchange (ICE) have dropped sharply, increasing concerns about the ability to ensure enough supply in the market, thereby continuing to support prices.

Both Arabica and Robusta coffee prices increased

In the report dated November 6, the standard Arabica inventory on ICE-US Department decreased by 12,454 bags of 60kg, bringing the total amount of coffee stored to 347,555 bags. This is the lowest inventory level ever recorded in more than 24 years.

Furthermore, Brazil's domestic Real strengthened yesterday, pulling the USD/BRL exchange rate down by 0.32%. The falling exchange rate difference has somewhat limited the selling power of Brazilian farmers. This also pushes up coffee prices.

Currently, Vietnam exports coffee to more than 80 countries. The EU is a large consumer market, accounting for 38.3% of the country's total coffee export volume.

According to the Import-Export Department - Ministry of Industry and Trade, in the third quarter of 2023, Vietnam's coffee exports to all market areas decreased compared to the previous quarter, but the export speed to Asia and Europe decreased. lower. Compared to the third quarter of 2022, Vietnam's coffee exports to most regions decreased, except Asia and Africa.

In terms of each market, in the third quarter of 2023, Vietnam's coffee exports to most markets decreased, except for Thailand, which increased slightly compared to the second quarter of 2023. Compared to the third quarter of 2022, coffee exports to many markets decreased, but exports to markets in Japan, Spain, Philippines, China, England... increased.

Regarding the structure of export products, in the third quarter of 2023, Robusta, Arabica and Excelsa coffee exports decreased by 45.5%, 69.2% and 66.7%, respectively, while processed coffee exports increased. 11.4% compared to the second quarter of 2023. Compared to the third quarter of 2022, exports of most coffee types decreased, but processed coffee grew by up to 33.9%.

Businesses are also making efforts to promote coffee processing to increase export value. For example, Cao Nguyen Coffee Service Joint Stock Company (owner of the Highlands Coffee chain) started construction of the Cao Nguyen Coffee Roasting Factory project, with an investment of up to 500 billion VND, meeting international standards with the ambition to bring Vietnamese roasted coffee on the world map. The factory has a capacity of nearly 10,000 tons of coffee/year in the first phase and can increase to 75,000 tons/year in the next phase.

Production line of Son La Coffee Processing Factory (Photo: Phuong Nguyen)

The largest coffee processing factory in the Northwest has just been officially put into operation in Son La province by the investor, Son La Coffee Processing Joint Stock Company. This is considered a positive signal for the processing stage - which is the weakest point of the agricultural product supply chain in general and coffee in particular, not only in the Northwest but the whole country in general.

Information from the Vietnam Coffee - Cocoa Association (Vicofa), in September, enterprises with foreign direct investment (FDI) accounted for a market share of about 70.5% of total export volume and about 69% of the value of raw green coffee turnover. For roasted, ground and instant coffee, FDI enterprises account for a market share of about 58.3% of the total coffee export volume and about 64.4% of the turnover. Currently, the world's largest coffee corporations are present in Vietnam - the world's largest Robusta raw material area.

Bao Ngoc