Coffee price today 8/9/2024

World coffee prices turned sharply down at the end of the session.

Domestic coffee prices are currently fluctuating between VND122,100 and VND122,800 per kilogram. This price range has nearly doubled since the beginning of the year due to reduced supply. In July, coffee export prices continued to increase, reaching USD4,844 per ton, up 5% from June and double that of the same period last year.

At the end of the session, Brazil's strong coffee export figures in July 2024 (44%) pushed both exchanges down. The market also made appropriate technical adjustments after a few days of strong increases before.

The Import-Export Department, Ministry of Industry and Trade, predicts that Vietnam's coffee exports will decrease in the remaining months of the third quarter due to low supply. Only in October, when the 2024-2025 coffee harvest begins, will the coffee supply increase again. Coffee exports are looking forward to the new harvest and it is forecasted that the whole year's coffee exports could set a record of 5.5 - 6 billion USD.

Vietnam's coffee output in the 2023/2024 crop year is estimated at only 1.47 million tons, down 20% compared to the previous crop year and the lowest level in the past four years, according to data from the Ministry of Agriculture and Rural Development.

Due to unfavorable weather conditions, coffee production for the 2024/2025 crop year may also continue to decline. Between now and September, Vietnam may have only about 200,000 tons of coffee left to export, excluding the inventory from last year.

Vietnam’s Import-Export Administration, under the Ministry of Industry and Trade, said that coffee exports will decline in the third quarter due to supply constraints. Coffee supplies are expected to increase again from October, right at the beginning of the 2024-2025 coffee harvest.

Before turning lower, global coffee prices had experienced strong gains as reports of frost affecting Brazil’s output spooked investors and forced some to close short positions. According to Bloomberg , Arabica coffee prices returned to their strongest levels after nearly a month of consecutive declines as forecasts of colder weather in Brazil prompted roasters to buy.

Domestic coffee prices closed the session on August 8 up 1,800 - 2,000 VND/kg in key purchasing localities. (Source: Getty Images)

According to the World & Vietnam, at the end of the trading session on August 8, the price of robusta coffee on the ICE Futures Europe London exchange turned down, the delivery term for September 2024 decreased by 45 USD, trading at 4,436 USD/ton. The delivery term for November 2024 decreased by 33 USD, trading at 4,253 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange decreased, with the September 2024 delivery term down 1 cent, trading at 245.30 cents/lb. Meanwhile, the December 2024 delivery term fell 2.65 cents, trading at 239.35 cents/lb. Trading volume was high.

According to the International Coffee Organization (ICO), the world could face a robusta coffee shortage of up to 35 million bags (60kg/bag) by 2040. In addition, world coffee prices are still supported by increased demand from European buyers before the provisions under the EUDR anti-deforestation law come into effect.

According to the Vietnam Coffee and Cocoa Association (Vicofa), unfavorable weather combined with outbreaks of mealybugs and red spiders will reduce the next robusta crop in Vietnam by 15% to 20%.

According to Vicofa's estimates, Vietnam's robusta coffee output in the 2023-2024 crop will be around 26.7 million bags, while the next crop in 2024-2025 will be between 21.4 and 22.7 million bags. This figure is significantly lower than Volcafé's previous preliminary forecast of 24 million bags and much lower than the US Department of Agriculture's (USDA) recent estimate of 27.85 million bags.

Vietnam’s coffee industry is facing many challenges from natural conditions, geopolitical tensions, and rising production costs. However, with its position as the world’s second largest coffee exporter and efforts to improve the value chain, Vietnam’s coffee industry still has the opportunity to overcome difficulties and continue to make important contributions to the national economy.

Vietnam continued to be the second largest coffee supplier to the EU market in the first months of the year with a turnover of more than 1 billion EUR, up 42.4% over the same period last year. This result helped Vietnam's market share in the EU increase from 15.2% to 20%.

According to the Import-Export Department, the demand for coffee from European importers is currently increasing due to the trend of stockpiling inventory ahead of the deadline for compliance with the European Union Deforestation Regulation (EUDR) standards. The EUDR is aimed at reducing the import of products linked to deforestation and requires strict verification and traceability measures for items including coffee.

The Import-Export Department said that last year, EU coffee imports from the world market decreased by 10% due to the economic recession and high inflation, causing people to tighten their spending. However, when the economy recovers, European people's demand for coffee will increase again.

The European Union has the highest per capita coffee consumption in the world, although consumption varies across member markets. The European coffee market size is estimated to reach $47.88 billion in 2024 and is forecast to reach $58.14 billion in 2029, growing at an average rate of 3.96% during the period 2024-2029.

Coffee is one of the most popular drinks in Western Europe due to its deep cultural roots and widespread use in consumers’ daily lives. In addition, the demand for coffee is also increasing in the region due to the opening of new coffee shops, the growth of coffee shop chains, and the increasing number of people buying coffee machines.

Therefore, Europe is considered a large potential market that any coffee producing country wants to exploit.