Coffee prices continued their fluctuating trajectory this week, with robusta futures falling for the fourth consecutive day, closing just above $5,000 per ton. Meanwhile, arabica coffee saw a recovery, marking a contrast to the previous week’s trends.
At the close of the week, robusta coffee futures for January 2025 delivery dropped by $98 per ton, while arabica coffee futures for March 2025 delivery rose by 3 cents per pound. This shift in price direction contrasts with last week, when robusta coffee prices had increased by $5.50 per ton, and arabica prices had declined by 56 cents per pound.
On the ICE Futures Europe in London, robusta coffee prices continued their downward trend, with January 2025 contracts decreasing by $50, closing at $5,011 per ton, and March 2025 contracts falling by $44 to $5,002 per ton. Trading volume remained low. In contrast, arabica coffee prices on the ICE Futures US New York exchange experienced a rise, with the March 2025 contract increasing by 1.25 cents, trading at 325.00 cents per pound, and the May 2025 contract rising by 1 cent to 319.30 cents per pound, with higher-than-usual trading volumes.
A key factor impacting coffee prices this week was the US Federal Reserve’s decision to cut interest rates, which caused a sharp rise in the US dollar. This, in turn, contributed to a significant depreciation of the Brazilian Real, making it more favorable for Brazilian coffee producers to export their beans. As a result, arabica coffee supply increased, and inventories monitored by ICE rose to a 2.5-year high, reaching 981,565 bags as of December 19.
Traders remain focused on Brazil’s upcoming coffee crop for 2025, with consultancy Safras & Mercado forecasting a 5% decline in overall coffee production to 62.45 million bags. Arabica output is expected to decrease sharply by 15% due to drought conditions, while robusta production is expected to rise slightly to 24.1 million bags.
Domestically, Vietnam’s coffee market showed mixed trends as well. Coffee prices in Vietnam dropped by an average of VND 3,000-4,000 per kg this week, with current prices ranging from VND 122,500 to VND 124,000 per kg. This is a reversal from the previous week, when domestic prices saw a slight increase. Heavy rains in Vietnam’s Central Highlands have raised concerns about the new crop, particularly its impact on coffee flowering and overall yield. Currently, the coffee harvest in Vietnam is 30-40% complete, with some worry over the potential effect of the weather on future production.
Vietnam, the world’s largest producer of robusta coffee, continues to face pressure from rising inventories, with stock levels climbing to a four-week high. However, strong demand for both Brazilian and Vietnamese coffee has provided some support for the market.
In terms of exports, Vietnam’s coffee industry has seen notable growth in 2024. In the first 11 months of the year, the country exported nearly 1.2 million tons of coffee, valued at $4.84 billion USD. While the volume of exports decreased by 15.4% compared to the same period last year, the value surged by 32.8%, driven by higher coffee prices. This has resulted in Vietnam surpassing its 2023 export revenue and is on track to achieve a new record of $5 billion USD by year-end.
Robusta coffee export prices in Vietnam have reached new highs in 2024, surpassing arabica prices for the first time. Since January, robusta prices have seen a sharp increase, with the price rising from just over $1,000 per ton in January to $3,000 per ton in October — a remarkable 5855% increase over the year. As of the first 11 months of 2024, the average export price stood at $4,037 per ton, marking a 56.9% increase from the same period in 2023.
The robust growth of Vietnam’s coffee industry has been supported by the country’s strong agricultural sector, which has adapted to challenges such as extreme weather, drought, and storms. In 2024, Vietnam’s coffee industry has set a new record, contributing to the country’s ongoing success as a major player in the global coffee market.
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