Coffee price today 8/2/2024

World coffee prices fell across both London and New York exchanges. Robusta coffee prices fell for the fourth consecutive session. Arabica coffee prices fell for the second session, but trading volume was quite high.

Domestic coffee prices fluctuate within a narrow range, currently trading quite quietly, in the price range of 123,000 - 123,500 VND/kg, due to the limited quantity of goods on the market. To meet export and domestic consumption needs, businesses are forced to import coffee from neighboring countries such as Indonesia, Laos, Thailand, Brazil, Belgium, etc. Domestic Arabica coffee is only grown in a few areas, so the quantity is limited, while this type is of high quality so it must be imported for consumption.

Coffee prices have been on a downward trend for the past three weeks, hitting a four-week low on the first trading day of August. A strong US dollar has pushed the Brazilian currency lower, prompting farmers to sell as the harvest nears its end. The pressure from the Brazilian harvest and the weakening of the real have combined to push up coffee prices, with $1 worth around 5.658 reals, a relatively low level for the Brazilian currency.

After several sessions of insignificant fluctuations, on the night of August 1, prices fell by over 100 USD/ton. This shows that European buyers do not want to follow the price fever but continue to wait. The reason is that Brazil is entering the final stage of the harvest season, although supply has decreased, the demand to sell to earn foreign currency is real. In addition, there are only more than 2 months left until Vietnam enters the 2024-2025 coffee harvest, so roasters and speculators want to wait for a better opportunity.

Domestic coffee prices on August 1 decreased by VND100/kg in some key purchasing localities. (Source: Kitco)

According to the World & Vietnam, at the end of the first trading session of August (August 1), the price of robusta coffee on the ICE Futures Europe London exchange decreased for the fourth consecutive session, the delivery period in September 2024 decreased by 36 USD, trading at 4,225 USD/ton. The delivery period in November 2024 decreased by 33 USD, trading at 4,083 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange fell for the second session, with the September 2024 delivery term down 1.95 cents, trading at 227.25 cents/lb. Meanwhile, the December 2024 delivery term fell 1.75 cents, trading at 226.40 cents/lb. Trading volume was high.

Overall, in the short term, the market is being pressured by increased supplies of arabica and robusta in Brazil, where the harvest is in its final stages. Brokerage Hedgepoint Global Markets said Indonesia is also supplying more robusta to the market as its harvest enters its peak. However, a decline in robusta exports from Vietnam continues to support prices.

The US dollar rose as geopolitical tensions increased, boosting demand for safe-haven assets, while the British pound fell after the Bank of England cut interest rates from a 16-year high. The risk of conflict in the Middle East remains a global concern, with both direct and indirect impacts on commodity futures.

In the long term, the weather-related supply shock appears to have no lasting effect. Indonesian government trade data from Sumatra, Indonesia’s top coffee-producing island, reported that the island’s robusta coffee exports in June were 130,367 bags, down 51.89% from the same month last year.

According to the General Statistics Office, in July, Vietnam's coffee exports reached 70,000 tons, down nearly 36% compared to the same period in 2023. In the first 7 months of 2024, Vietnam's coffee exports reached 964,000 tons, down nearly 14% compared to the same period last year.

Coffee cooperative Cooxupé has reported that Brazil’s weather conditions could impact the 2025 coffee crop if the dry weather continues. Large coffee growing regions in southeastern Brazil have experienced drier weather and low rainfall, which is normal as winter is a drier and cooler time of year for Brazil, but there are still a few months left before the seasonal flowering season. Therefore, the report from Cooxupé mentions the onset of the spring rains, which will take place in the last quarter of the year, which will be closely watched because this is the period needed to trigger flowering for the next 2025 crop.