Coffee prices on 04/20/2024: Slight recovery

Coffee prices on April 20 globally

In the world market, both London and New York exchanges saw slight increases on April 20.

Specifically, Robusta prices on the London exchange for May 2024 delivery increased by $ 2 to reach $ 4,083/ton. And the July 2024 delivery futures rose slightly by $ 18 to reach $ 4,080/ton.

As for the New York exchange, Arabica prices for May 2024 delivery inched up by 1.55 cents to 241.40 cents/lb. The July 2024 delivery futures also increased by 0.75 cents to 231.85 cents/lb.

Coffee prices on 04/20/2024 in the world market saw a slight rebound after a sharp decline yesterday.

According to the International Coffee Organization (ICO), global coffee production for the 2023/24 season is expected to increase by 5.8% compared to the previous season, reaching 178 million bags. Consumption is forecasted to rise by 2.2% to 177 million bags. This surplus of 1 million bags is anticipated for the 2023/24 season.

In March, Rabobank forecasted a surplus of 500,000 bags for the 2023/24 season and reduced its estimate of production by about 3.9 million bags to approximately 171.1 million bags, mainly due to estimated decreases in production in Indonesia and Honduras.

Brazil is expected to announce its third consecutive annual increase in coffee output this year, a rare occurrence seen only 7 times in the 144-year history of coffee production and export in the world's largest coffee-producing and exporting country, according to Reuters.

Experts suggest that this positive trend may continue for another year, until 2025, mainly due to increased Robusta production in a country with a history of producing Arabica favoured by upscale coffee shops. Robusta is widely used for instant coffee blends.

Thus, the world coffee prices on April 20, 2024, showed a slight increase compared to yesterday.

Coffee prices on April 20 domestically

In the domestic market, coffee prices on April 20 increased slightly by VND 300/kg compared to yesterday.

Specifically, in Lam Dong province, the districts of Di Linh, Bao Loc, and Lam Ha are trading at the same level of VND 119,900/kg.

In Dak Lak province, the Cư M'gar district is purchasing at VND 120,300/kg today. Meanwhile, the Ea H'leo and Buon Ho districts are trading at VND 120,200/kg.

In Dak Nong province, traders in Gia Nghia and Dak R'lap are trading at VND 120,500 and VND 120,400/kg, respectively.

In Gia Lai province, the Chư Prông district is trading at VND 120,300/kg, while Pleiku and La Grai districts are maintaining the same level of VND 120,200/kg.

The purchase price in Kon Tum today is VND 120,300/kg.

The domestic coffee price today turned slightly upwards, thereby stabilizing this agricultural product at the threshold of VND 120,000/kg.

Currently, the coffee harvesting activities for the 2023/24 crop season have concluded. According to the Mercantile Exchange of Vietnam (MXV), farmers and traders in Vietnam are deliberately holding back from selling this agricultural product in anticipation of higher prices, although there is no concrete evidence to support this.

The situation of supply shortage in the market may be occurring, but the cause is not due to subjective factors in Vietnam.

Firstly, since the commencement of the 2023/24 harvest season in Vietnam, coffee exports have consistently remained high compared to previous years. According to data from the General Department of Customs, cumulative coffee exports from November 2023 to February 2024 were over 9% higher than the same period the previous year and increased by 22% compared to the five-year average.

Secondly, the scarcity of this commodity is also evident in the domestic market despite the recent conclusion of the 2023/24 harvest season. Specifically, the forecasted production for the 2023/2024 crop season in Vietnam is expected to remain low due to adverse weather conditions. According to Vicofa's forecast, coffee production for the 2023/2024 crop season is estimated to decrease by 10% compared to the previous season, reaching around 1.6 million tons - the lowest level in the past four crop seasons.

Moreover, the low inventory from the previous crop season has left farmers with a limited surplus for the new harvest season. The US Department of Agriculture (USDA) estimates that Vietnam's ending inventory for the 2022/23 crop season was 339,000 bags and is projected to reach only 359,000 bags by the end of the 2023/24 crop season - the third lowest level in the past 17 crop seasons.

Thirdly, in the Central Highlands region, besides focusing on coffee cultivation, farmers are increasingly paying attention to other crops that bring higher economic benefits, such as durian and passion fruit. Furthermore, compared to other fruit crops, the shelf life of these agricultural products is usually longer. Therefore, farmers tend to prioritize the transportation of durian and passion fruit first.

Thus, the domestic coffee price on April 20, 2024, is trading around the range of VND 119,900 - 120,500/kg.