Global coffee supplies have been hit by heavy rains in Brazil and a heatwave in Vietnam, and international experts say the situation is unlikely to improve anytime soon. Ongoing weather problems in major coffee-producing countries continue to push prices higher.
Coffee price today 6/22/2024
World coffee prices turned sharply down, down more than 0.5% for both robusta and arabica, after a strong increase to a two-week high.
Domestic coffee prices decreased by VND1,600/kg, trading at VND120,500 - 121,600/kg in some key purchasing localities.
Experts say the reason for the decline is the high USD these days. Robusta and Arabica coffee prices are forecast to decrease in the coming time. The coffee harvest in Brazil is expected to end in July 2024. According to the forecast of the United States Department of Agriculture (USDA), Brazil's coffee output this season could reach 69.9 million bags (60 kg/bag); of which, Arabica coffee output is expected to increase by 7.35% and Robusta coffee output is estimated to increase by 1.4%.
These figures are slightly higher than forecasts from market research firms. As new supplies from Brazil enter the market, world coffee prices may come under downward pressure.
Meanwhile, while Brazil’s new crop has yet to make much of an appearance on the market, global supplies of Arabica coffee from other sources continue to grow, with global shipments up 11% from October 2023 to April 2024, compared to the same period last year, according to ICO data.
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| Domestic coffee prices today, June 22, decreased by 1,500 VND/kg in some key purchasing localities. (Source: YouTube) |
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 term down 5.32 cents, trading at 225.00 cents/lb. Meanwhile, the September 2024 delivery term fell 5.3 cents, trading at 223.25 cents/lb. Average trading volume was low.
Domestic coffee prices today, June 22, decreased by VND 1,500/kg in some key purchasing localities. Unit: VND/kg
(Source: giacaphe.com) |
But in the long term, experts at consultancy The Smart Cube say, extreme weather in Brazil and Vietnam is to blame. Together, the two countries account for 55% and 50% of global coffee production and exports, respectively.
Coffee prices remained supported by continued hot and dry weather in Brazil and Vietnam, adding to concerns about global coffee production for the next crop.
Investors are also watching the weather in top producer Brazil, which, while typically dry at this time of year, has been hit by a drought and low temperatures in the country’s winter, raising concerns about future supplies, said Thiago Cazarini, president of Cazarini Trading Co.
Hot, dry weather in Vietnam has also raised concerns about the next harvest in the world’s largest exporter of robusta coffee, which supplies the type used in instant coffee. Vietnam is expected to see scattered showers in the coming period, indicating that rainfall so far in June has been too little, Maxar reported.
Currently, it is not possible to calculate statistics, but it is certain that the coffee output in the 2024-2025 crop year will not be equal to the previous crop year, so the Vietnamese coffee industry needs to prepare more "defensive" scenarios and better control risks in the new coffee crop year.
According to some industry experts, in the coming time, coffee prices will likely not fluctuate as strongly as in recent months but will still maintain a high level. The reason is that Brazil is in the peak harvest season. Then, in October, it will be the harvest season in Vietnam.
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