Coffee price today 8/10/2024

World coffee prices continued to plummet, falling sharply on both exchanges at the end of the week (August 9), due to liquidation pressure.

Domestic coffee prices continued to decrease compared to the same time yesterday, currently trading in the range of 121,100 - 121,800 VND/kg.

Information about the harvest in Brazil, especially the weather situation, is the focus of attention of funds and speculators. This is one of the factors that strongly affects the coffee market on both derivatives exchanges. In particular, information about frost in Brazil not having much impact on the harvest has pushed the price of Arabica coffee down sharply for 2 consecutive days.

Reports that coffee trees in Brazil are doing well despite a prolonged drought in producing areas could help the 2024/25 crop yield to be bumper once rains arrive. Most farmers here expect this year’s crop, which is about 80% yield-wise, to be similar to the previous crop. The world’s largest coffee cooperative, Cooxupé in Brazil, expects to receive its biennial crop of 6.8 million bags of coffee from its member farmers. The report also forecasts that its members will export around 5.5 million bags next year.

The news looks good for the Arabica market, but the forecast is not so good for Robusta. Accordingly, by 2040, the world may have a shortage of 35 million bags of Robusta coffee due to climate change and the increasing trend of consuming bitter coffee.

Domestic coffee prices closed on August 9 down 1,000 VND/kg in key purchasing localities. (Source: atticacoffee)

According to the World & Vietnam, at the end of this week's trading session (August 9), the price of robusta coffee on the ICE Futures Europe London exchange fell sharply, with the September 2024 delivery term down 110 USD, trading at 4,326 USD/ton. The November 2024 delivery term down 91 USD, trading at 4,162 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange fell sharply, with the September 2024 delivery term down 11.25 cents, trading at 234.05 cents/lb. Meanwhile, the December 2024 delivery term down 9.10 cents, trading at 230.25 cents/lb. Trading volume was high.

In a recent report, the Import-Export Department (Ministry of Industry and Trade) estimated that in the first 7 months of 2024, Vietnam exported 964 thousand tons of coffee, worth nearly 3.54 billion USD, down 13.8% in volume, but up 30.9% in value over the same period last year.

Thus, in July alone, coffee exports are estimated at more than 70,000 tons, down 35% over the same period last year and almost unchanged compared to May.

The agency forecasts that Vietnam’s coffee exports will decline in the remaining months of the third quarter due to low supplies. Coffee supplies will increase again in October, when the 2024-2025 coffee harvest begins.

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 (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. Thus, if not counting the inventory carried over from the previous year, Vietnam will only have about 200,000 tons left to export from now until September.

Vietnam’s coffee industry is facing many challenges from natural conditions, geopolitical tensions, and rising production costs. However, the world market’s robusta consumption trend and the global decline in robusta coffee supply have pushed prices up continuously in the first months of the year. Vietnam, the world’s largest producer and exporter of robusta coffee, is said to benefit from this trend.

In addition, the Vietnam - EU Free Trade Agreement (EVFTA) which took effect in August 2020 also helped the Vietnamese coffee industry increase its value and expand its market share in the EU. In particular, for roasted coffee, instant coffee and other coffee products, when the tax rate has been reduced to 0%, it creates favorable conditions for processing and increasing the value of Vietnamese coffee, thereby increasing export turnover to the EU.

Vietnam has now surpassed many other leading producing countries such as India, Switzerland, Brazil... to become the leading supplier of processed coffee (instant coffee, coffee blends) to the EU, second only to the UK market.

Vietnam's exports of instant coffee and coffee extracts (HS 2101) to the EU in the first five months of the year increased by 86% compared to the same period last year, reaching 64.5 million EUR. This is double the 40% growth rate of 1 billion EUR of green coffee (HS 0901). However, green coffee (HS 0901) still accounts for a large proportion of about 94% of Vietnam's total exports to the EU compared to 6% of instant coffee and coffee extracts.