Export coffee prices increase when supply from Vietnam is forecast to decrease by 20%

According to the Vietnam Commodity Exchange (MXV), at the end of the March 25 session, the prices of two coffee products continued to increase by 1.29% for Arabica prices and 1.4% for Robusta prices, respectively. Fear of supply risks in the market was a factor supporting Arabica prices yesterday.

In the closing report on March 25, the standard Arabica inventory on the ICE-US Department continued to be added with nearly 9,000 60kg bags, bringing the total amount of Arabica in storage to the highest level in more than 9 months, reaching 577,023 bags. .

However, the amount of coffee waiting to be sorted to add to ICE's reserves has continuously decreased for nearly two weeks, to about 80,000 bags. This may inhibit the ability to expand the capacity for inventory data in the near term.

The prices of two coffee products continued to increase by 1.29% for Arabica and 1.4% for Robusta, respectively.

With Robusta, the Vietnam Coffee Association (Vicofa) estimates that the amount of coffee exported in our country's 2023/24 crop year will decrease by 20% compared to the previous crop year, down to 1.336 million tons. Output declined after facing dry weather. These less positive signals contribute to increasing concerns about supply shortages in the market.

According to the Vietnam Coffee and Cocoa Association (Vicofa), the forecast is only about 1.6 - 1.7 million tons, lower than the 1.78 million tons of the previous 2022/2023 crop year. The above information has pushed Robusta coffee futures prices on the London floor to set a new record, drawing Arabica back to an uptrend.

General Director of 2/9 Dak Lak Import-Export Company Limited (Simexco Dak Lak) Le Duc Huy commented that currently the unit only accepts more orders if there are positive signs from the supply from farmers.

The amount of coffee exported in the 2023/24 crop year of our country decreased by 20% compared to the previous crop year, down to 1.336 million tons.

However, the amount of coffee stored by the people has begun to run out and is scarce. Considering the unfavorable weather situation for crops, it is forecast that the upcoming crop yield will decrease, leading to scarce supply, this is the biggest concern of businesses.

Experts say that with coffee prices at the current good level, farmers benefit the most, with increased income. However, to harmonize the interests of all parties, it is necessary for farmers to share with businesses operating in the coffee sector so that local agricultural products have both output and stable development.

According to the leader of the Department of Agriculture and Rural Development of Dak Lak province, with coffee prices at the current good level, farmers benefit the most, with increased income. However, to harmonize the interests of all parties, it is necessary for farmers to share with businesses operating in the coffee sector so that local agricultural products have both output and stable development.

The coffee market is in a period of price fever, focusing on Robusta - the type of coffee for which Vietnam is the number 1 supplier globally. The current sudden increase in domestic coffee prices is due to a decrease in Robusta output of nearly 20%, partly due to the influence of climate change and the strong impact of the El Nino phenomenon.

Year by year, coffee processing factories around the world become increasingly dependent on Vietnamese Robusta raw materials. However, they are accustomed to setting low prices to get high profits.

Robusta coffee is a product consumed globally, and for many people it is even an essential commodity that cannot be abandoned. But for farmers, if growing coffee is not profitable, they are willing to give up - then it will be a threat to the world's supply. This year, the Central Highlands is in drought, and a serious Robusta coffee shortage is still ahead.

Robusta coffee output plummeted by nearly 2 million bags in Vietnam, which is one of the reasons pushing up prices. But Robusta coffee output in many other sources such as India, Indonesia... also decreased sharply this year.

Vietnamese Robusta coffee is at a "golden opportunity" to build a national brand when it has all the factors such as high quality, good value, and modest output. Analysts say that, year by year, coffee processing factories around the world become increasingly dependent on Vietnam's Robusta raw materials, but they are accustomed to setting low prices for high profits. Meanwhile, it is predicted that a serious shortage of Robusta coffee is still ahead, ending the era of cheap raw coffee.