Robusta coffee export prices suddenly drop sharply

According to the Vietnam Commodity Exchange (MXV), on October 2, the prices of two coffee products simultaneously fell sharply during the trading session. Of which, the price of Arabica coffee lost nearly 3% compared to the reference price, to 5,654 USD/ton, the lowest in the past two weeks; the price of Robusta coffee fell sharply by more than 6%, to nearly 5,100 USD/ton. A series of basic information favorable to the crop as well as the coffee supply has put pressure on prices.

Robusta coffee prices suddenly dropped sharply by 6% to nearly 5,100 USD/ton.

The LESG weather forecasting agency said that the drought in the Southeast region - Brazil's main coffee growing region - may end by the end of this week. From next week, a cold air mass from the South will gradually move to the Southeast region, bringing rain, causing the average temperature to drop. It is expected that in 15 days, the rainfall in the Southeast may be 50 mm higher than normal and the temperature will drop by 2-4 degrees Celsius. The improved weather conditions lead to the expectation that the coffee crop in Brazil can recover after a series of record-breaking dry days.

In addition, the European Commission is proposing to postpone the implementation of the new regulation on the import of goods by 12 months. Previously, the EU issued the Deforestation Prevention Regulation (EUDR). This regulation prohibits the import of 7 groups of goods, including: coffee, palm oil, wood, rubber, beef, cocoa and beans into the EU if the production of these goods causes deforestation.

This move could help coffee trade remain stable in the coming period as some coffee producers are still trying to meet the requirements. Moreover, the late implementation of the EUDR regulation could also encourage European coffee importers to temporarily stop massive imports (to ensure enough supply before being unable to import coffee due to the implementation of the new regulation), thereby helping to bring the supply and demand of coffee in the market back into balance.

More positive coffee production and export prospects from some of the world's top coffee producing countries also added pressure on coffee prices yesterday.

Honduras, Central America's largest coffee grower, said it expects to export about 5.37 million bags, up 14.5% from the previous season thanks to increased production this year. Earlier, the Indonesian government announced that its coffee exports in August exceeded 19,000 tons, up 18% from the same month last year.

Colombia, the world's largest exporter of high-quality Arabica coffee, also estimates production at around 13 million bags in the 2024-2025 crop year, while total exports are around 12 million bags, up 14.3% from the previous crop year.

In Lam Dong and Dak Lak , coffee has begun to ripen early. Every year, when the harvest begins, coffee prices are expected to fall due to increased supply. However, this year, drought has reduced the size of coffee cherries, leading to an expected 10% to 15% reduction in production.

Therefore, high coffee prices help growers earn better income than last year. It is expected that from the end of October 2024, when Vietnam enters the harvest season, coffee output will increase and exports could reach 6 billion USD.

According to the General Department of Customs, from the beginning of the year to September 15, Vietnam exported 1.07 million tons of coffee with a value of 4.13 billion USD. Although the volume decreased by 12%, Vietnam's coffee export turnover increased by 35.8% compared to the same period.

The impact on the above difference is due to the fact that Vietnam's average coffee export price from the beginning of 2024 to September 15 increased by 54.7% over the same period, from 2,476 USD/ton in the previous period to 3,833 USD/ton in this period.

Regarding the crop season, Vietnam is currently starting to harvest with positive forecasts. Many coffee businesses and associations have surveyed growing areas and found that thanks to the recent high coffee prices, growers are focusing on taking good care of the coffee.

According to Mr. Trinh Duc Minh, Chairman of Buon Ma Thuot Coffee Association (Dak Lak province), although affected by drought at the beginning of the year, causing a decrease in coffee productivity, the decrease was only about 5-10%, not too serious. Previously, some forecasts said that Vietnam could lose 10-20% of output due to crop failure and reduced planting area.

Robusta coffee export prices suddenly dropped sharply. Photo: TH

The Vietnam Commodity Exchange has just announced the most traded commodities in Vietnam in the third quarter, Robusta coffee ranked 4th and accounted for 6.8% of total trading volume. Arabica coffee also returned to the race and closed the ranking of the top 10 most traded commodities in Vietnam in the third quarter with a proportion of 5.1%.

In the fourth quarter of this year, many experts believe that commodity prices will fluctuate strongly due to many unpredictable factors appearing in the market such as: increased geopolitical tensions, climate change, extreme weather, etc.

Regarding coffee, prices will generally continue to be maintained and anchored at a higher level than the same period of previous years due to the expected decrease in supply from the two largest coffee producing markets in the world, Brazil and Vietnam, due to the weather heavily affecting the crop, crop quality and harvest yield. Meanwhile, weather developments in the US and South America will also play an important role in influencing the agricultural product price chart in the coming time.

Source: https://congthuong.vn/gia-ca-phe-robusta-xuat-khau-bat-ngo-giam-manh-349922.html