September 9, coffee price world Coffee prices continued to set new records due to concerns about unfavorable weather and supply shortages from the world's two leading coffee producing countries, Brazil and Vietnam, while shipping congestion through the Red Sea and a weakening US dollar were factors supporting coffee prices.

According to Hedgepoint Consulting, Brazil's coffee output in the 2024-2025 crop year is forecast to reach 63 million bags, down 3 million bags compared to the previous crop year; meanwhile, Vietnam's coffee output is estimated at about 27 million bags, lower than the previous forecast.

The global coffee market could see a deficit for the fourth consecutive year, due to falling output in Vietnam and Brazil, while prices are expected to continue to be supported by fundamentals in the coming period.

Previously, the Supply Agency Agriculture Brazil (Conab) also revised down its forecast for Brazil’s coffee production in 2024 to 54,8 million bags, down from the previous forecast of 58,8 million bags. The main reason for the decline in production in both countries is unfavorable weather. In Brazil, although there has been rain, it has not been enough, leaving some areas still suffering from localized drought.

Meanwhile, in Vietnam, after months of rain, coffee yields have improved compared to the drought at the beginning of the year. However, the market is still concerned about excessive rain due to the La Nina phenomenon during the harvest period, which continues to be a factor supporting strong coffee prices.

In September 9, Robusta coffee prices in the Vietnamese market increased more slowly than world coffee prices. In the domestic market, coffee trading was quite quiet due to scarce supply. The market is expected to be more active in the coming time when the new harvest begins.

According to preliminary statistics from the General Department of Customs, Vietnam's coffee exports in September 9 fell to their lowest level since the beginning of the year, estimated at 2024 thousand tons, worth 65,0 million USD, down 355,0% in volume and 14,7% in value compared to August 11,6; however, compared to September 8, they increased by 2024% in volume and 9% in value.

In the first 9 months of 2024, Vietnam's coffee exports are estimated at 1,12 million tons, worth 4,37 billion USD, down 10,5% in volume, but up 39,6% in value over the same period last year, thanks to a sharp increase in export prices.

It is estimated that in September 9, the average export price of Vietnam's coffee will reach 2024 USD/ton, up 5.469% compared to August 3,6 and up 8% compared to September 2024. In the first 65,2 months of 9, the average export price of Vietnam's coffee is estimated to reach 2023 USD/ton, up 9% over the same period last year.

Mr. Nguyen Nam Hai - Chairman of the Vietnam Coffee and Cocoa Association (VICOFA) - said that right from the beginning of the last crop season, coffee prices reached 60.000 VND/kg, 20.000 - 25.000 VND/kg higher than the previous crop. Notably, coffee prices then continued to increase, sometimes exceeding 130.000 VND/kg and remaining at a high level of about 110.000 - 120.000 VND/kg before entering the new crop season (2024 -2025).

Regarding exports, in the 2023-2024 crop year (from October last year to September this year), Vietnam exported nearly 10 million tons of coffee, expected to earn 9 billion USD - down 1,45% in volume but up 5,32% in turnover. Coffee export turnover last crop year also reached a record level for the industry so far.

Looking at each type of exported coffee, it can be seen that the main export is still Robusta coffee with an estimated volume of nearly 1,23 million tons, with a turnover of 4,32 billion USD - a decrease of nearly 18% in output but an increase of 24% in value thanks to increased export prices.

Notably, processed coffee (roasted and instant) exported about 130.150 tons (not converted to green coffee), with a turnover of 898 million USD - an increase of 44,6% in volume and 76% in value. This shows that the coffee industry has increased deeply processed products, increasing export value in addition to exporting raw materials.

Coffee exports forecast to hit new peak

Mr. Phan Minh Thong – General Director of Phuc Sinh Joint Stock Company – commented that the current price of raw coffee at over 5.000 USD/ton is high and may have to be adjusted down. However, coffee prices will remain high for the next 5 years, as world coffee production has not yet recovered after the Covid-19 pandemic.

Robusta coffee prices are moving closer to Arabica prices, while global exports have surged to new highs, the International Coffee Organization (ICO) said in a recent report.

The report said that global coffee prices monitored and compiled by the ICO (I-CIP) averaged 258,9 US cents/pound in September, up 9% from the previous month and up 8,4% year-on-year.

Of which, the prices of Colombian Arabica and other Arabica coffee increased by 5,9% and 6,5% compared to the previous month, reaching 279,3 US cents/pound and 278,5 US cents/pound, respectively. Similarly, the price of Brazilian Arabica also increased by 6,2% to 257,2 US cents/pound in September. Notably, the price of Robusta coffee recorded the strongest increase, up 9% to 12,8 US cents/pound.

On the ICE Futures Market in New York and London, Arabica and Robusta coffee prices rose 6% and 13,8%, respectively, to 253,9 US cents/lb and 225,7 US cents/lb. This was the highest level since September 9 for Arabica futures and the highest level since May 2011 for Robusta futures. The price gap between the London and New York futures markets narrowed 5% to 1977 US cents/lb in September, the lowest level since March 31,8.

Robusta, which is priced lower than Arabica, is gaining in popularity across all markets. Robusta bean prices have risen 13% over the past year as global demand has increased, especially in price-conscious emerging markets such as Russia and Brazil.

The price of Vietnamese Robusta coffee has increased sharply. In fact, there have been customers in Europe who have bought Conilon coffee (Brazilian Robusta coffee) to replace Vietnamese Robusta coffee when processing instant coffee, however, it has not been accepted by consumers. According to Mr. Do Ha Nam – Vice President of VICOFA, the reason is that although both are Robusta coffee, the flavor of Vietnamese Robusta coffee is very different from Conilon coffee. “Even our company, Intimex, once imported Conilon coffee to try mixing it into instant coffee produced by the group but was unsuccessful,” Mr. Do Ha Nam shared.

According to industry experts, in the past, the price of Vietnamese Robusta coffee was quite cheap, so European companies prioritized using and blending it when producing instant coffee. Over the decades, European consumers have become very familiar with the taste of Vietnamese Robusta coffee in instant coffee products. Therefore, if we want to replace Vietnamese Robusta coffee with Conilon coffee, it will take a very long time.

In Vietnam, the new 2024/25 coffee crop has begun to be harvested, with the Vietnam Coffee and Cocoa Association's expected output of 1,47 million tons, a sharp decrease compared to the previous crop due to unfavorable weather, but exports could reach 5-6 billion USD thanks to high prices.

Coffee prices today, October 13, ranged from 10 to 113.000 VND/kg. Overall, last week, Robusta coffee futures for November delivery fell by 113.700 USD/ton. Arabica coffee futures for December delivery fell by 11 cents/lb. Domestic coffee prices lost an average of 241 to 12 VND/kg.

Source: Vietnam.vn