Coffee price today 8/14/2024

World coffee prices fell sharply after a surge due to market adjustments.

Domestic coffee prices lost nearly 2,000 VND/kg, trading at around 118,000 - 118,500 VND/kg.

Experts believe that the market is adjusting to a stable level before the announcement of US inflation information later today (August 14). Accordingly, speculators on the floor are not foolish enough to let the market increase sharply at this time, so coffee has turned around and adjusted right before increasing too much.

Previously, concerns about frost in Brazil had pushed robusta coffee prices to their highest level in nearly four weeks. According to the media, the weather in Brazil has been unfavorable as it has turned cold, with frost forecast. Many people are worried that after the recent drought, if frost appears, it will greatly affect the next crop's coffee production in the states of Rio Grande do Sul, Santa Catarina and Paraná - major coffee growing areas in Brazil.

The International Coffee Organization (ICO) also said that Brazil - a country that supplies 40% of the world's coffee output - lost 20% of its crop in 2021 due to the double impact of frost and drought. Indonesia recorded a 20% drop in robusta production last year due to El Nino - an extreme weather phenomenon that only shows signs of easing this year.

However, that is still a problem for the next crop year, and currently, coffee prices are being influenced by developments in the financial and monetary markets as well as the upcoming US interest rate policy. At this time, many people believe that the US Federal Reserve (Fed) may soon loosen monetary policy without waiting for inflation to fall to 2%. Because the change in US monetary policy may happen soon, after the coffee price increased to a near record high, investors quickly sold to take profits, causing the market to turn around and fall sharply and immediately after the market opened.

Domestic coffee prices have dropped by nearly VND2,000/kg in key purchasing locations. (Source: Lecafebmt)

According to World & Vietnam , at the end of the trading session on August 13, the price of robusta coffee on the ICE Futures Europe London exchange turned down sharply, the delivery term for September 2024 decreased by 157 USD, trading at 4,375 USD/ton. The delivery term for November 2024 decreased by 172 USD, trading at 4,187 USD/ton. The average trading volume is high.

Arabica coffee prices on the ICE Futures US New York floor also fell sharply, with the September 2024 delivery term down 8.15 cents, trading at 232.7 cents/lb. Meanwhile, the December 2024 delivery term fell 9.50 cents, trading at 229.05 cents/lb. Trading volume was high.

According to data from the General Department of Customs, in July, Vietnam's coffee exports reached 76,982 tons, worth 381.2 million USD, down 29.3% in volume but up 23.8% in value compared to the same period last year. Notably, the average export price of coffee last month reached a record 4,951 USD/ton, up 7.8% compared to the previous month and up 75.1% (equivalent to 2,123 USD/ton) compared to the same period in 2023.

With favorable price factors, the coffee industry is expected to bring in a record export turnover of 5 billion USD this year.

Thus, at the end of the first 10 months of the 2023-2024 crop year (from October last year to July this year), Vietnam's coffee exports reached more than 1.3 million tons, out of a total output of about 1.47 million tons of the current crop year, equivalent to 90% and down 12.4% compared to the same period last crop year.

Excluding the inventory carried over from the previous year, Vietnam will only have about 130,000 tons of coffee left to export in the remaining 2 months of the 2023-2024 crop year (from August to the end of September). This year's reduced output combined with low inventory carried over from the previous year are the main reasons why Vietnam's coffee exports have continuously decreased in the past 6 months.

The Import-Export Department (Ministry of Industry and Trade) forecasts that Vietnam's coffee exports will continue to decline in the remaining months of the third quarter due to low supply. Only in October, when the 2024-2025 coffee harvest begins, will coffee supply increase again.

In the 2023-2024 crop year, Vietnam's coffee output is estimated at 1.47 million tons - the lowest level in 4 years, down 20% compared to the 2022-2023 crop year according to statistics from the Ministry of Agriculture and Rural Development. Coffee output in the 2024-2025 crop year is likely to continue to decrease due to unfavorable weather factors.