Robusta coffee prices yesterday went down by 2.95% compared to the reference. Meanwhile, Arabica coffee prices fluctuated strongly but increased by 0.42% at the close of the session.
According to the Vietnam Commodity Exchange, Arabica coffee prices fluctuated strongly but increased by 0.42% at the close of the session. Initially, the positive outlook for new coffee supply in Brazil put pressure on prices. After that, the exchange rate went down, which helped the prices recover at the end of the session.
Vietnam’s coffee prices are likely to be the most expensive in the world in 2024.
The Brazilian Government’s Crop Supply Agency (CONAB) forecasts that Brazil’s coffee production in 2024 will reach 58.08 million 60kg bags, an increase of 5.5% compared to 2023. In particular, Arabica will reach 40.75 million bags, an increase of 4.7% compared to the previous crop. The positive outlook helps Brazilian farmers to be ready to boost coffee exports in the coming time.
However, by the second half of the evening session, the Dollar Index weakened, causing the USD/BRL to be down. The narrowing exchange rate gap has raised concerns about Brazil’s ability to boost coffee exports. This helps prices quickly increase again.
Robusta prices continued to go down from their 16-year highs, which ended yesterday, down another 2.95% from the reference. However, the market is still concerned about tensions on the Red Sea disrupting coffee exports from major producing countries such as Vietnam.
Analysts said that Robusta coffee prices fell due to signs showing that coffee buyers are avoiding buying Robusta coffee from Vietnam. In the context of escalating tensions in the Red Sea and the Middle East, the transportation costs and delivery time of Robusta coffee batches from Southeast Asia in general, Vietnam in particular, have increased sharply.
It has led some of the world’s major coffee roasters to reduce their purchases of Robusta coffee from Vietnam and look for supplies from Brazil or other countries outside Southeast Asia.
Coffee export prices fluctuated sharply.
Regarding Arabica coffee, the latest updated weather forecast shows that the likelihood of rain this week in Brazil’s main coffee-growing regions has dropped. This is causing the market to concern again about Brazil’s output prospects for the coming year.