Coffee price drop is only temporary, is the market also strengthened by this factor?

World coffee production in 2024/25 is expected to increase by about 4.2% to 176.235 million bags, with Arabica coffee increasing by +4.4% to 99.855 million bags and Robusta production increasing by +3.9% to 76.38 million bags. Ending inventories in 2024/25 are forecast to increase by +7.7% compared to 2023/24, according to the US Department of Agriculture 's biannual report.

Coffee price today June 23, 2024

World coffee prices turned down in the closing session of the week on both London and New York exchanges, but according to experts, the decline was only temporary due to speculation liquidating buying and selling positions before information from the crop report of the US Department of Agriculture.

The overall trend is still in favor of coffee, with two factors supporting the strong increase: freight rates and concerns about dry weather and lack of rain in Brazil, affecting the ongoing harvest.

According to the World & Vietnam, at the end of this week's trading session (June 21), the price of robusta coffee on the ICE Futures Europe London exchange fell sharply, with the July 2024 delivery term down 75 USD, trading at 4,299 USD/ton. The September 2024 delivery term down 72 USD, trading at 4,104 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange fell sharply, with the July 2024 delivery contract falling 5.32 cents, trading at 225.00 cents/lb. Meanwhile, the September 2024 delivery contract fell 5.3 cents, trading at 223.25 cents/lb. Average trading volume was low.

Domestic coffee prices at the end of this week's session (June 22) decreased by 1,500 - 1,600 VND/kg in some key purchasing localities. (Source: Spectrumnutrition)

Domestic coffee prices decreased by 1,500 - 1,600 VND/kg, down to 120,500 - 121,600 VND/kg in some key purchasing localities.

Brazil’s coffee harvest is picking up, a factor that has contributed to the price decline. Safras & Mercado reported Friday that Brazil’s 2024/25 coffee harvest was about 44% complete as of June 18, 39% ahead of the same time last year and 40% ahead of the five-year average.

Meanwhile, the Real remained in a low range against the USD throughout the week, mostly trading around a low of 5.454 Brazilian Reals to 1 USD. The weak Real also contributed significantly to the decline in coffee prices.

Domestic coffee prices at the end of this week's session (June 22) decreased by 1,500 - 1,600 VND/kg in some key purchasing localities. Unit: VND/kg

Average price	Medium
USD/VND exchange rate	25,218	0
DAK LAK	121,500	- 1,500
LAM DONG	120,500	- 1,500
GIA LAI	121,500	- 1,500
DAK NONG	121,600	- 1,600

(Source: giacaphe.com)

Prices of both coffees, which had been underpinned by concerns over excessive drought in Vietnam and Brazil, were now refreshed by news from the FAS forecast, sending prices lower at the end of the week.

The USDA reports that the October 2024 to September 2025 harvest in Vietnam, the main robusta producer, will also produce a total of 29 million bags. They expect this figure to be 0.35% smaller than the October 2023 to September 2024 harvest.

In just the first two quarters of the year, Vietnam’s coffee exports reached more than 3 billion USD, up 38% over the same period last year. Germany is the country that imports the most Vietnamese coffee.

Export volume decreased by more than 8% but increased by 38% in value compared to the same period last year. This is also a record high compared to the same period of previous years.

According to the Ministry of Agriculture and Rural Development, the amount of coffee remaining in the domestic market is very small. The coffee output of the upcoming crop is forecast to continue to decrease by about 20% due to the recent prolonged heat wave leading to severe drought in the Central Highlands.

Source: https://baoquocte.vn/gia-ca-phe-hom-nay-2362024-gia-ca-phe-giam-chi-la-nhat-thoi-thi-truong-con-duoc-cung-co-boi-yeu-to-nay-275989.html