On March 11, the price of coffee beans in the Central Highlands provinces was sold for about 32,100-32,800 VND (1.39- 1.42 USD) / kg, an increase of about 300-500 VND / kg compared to 31,800- 32,300 dong a week ago. Export coffee (grade 2, 5% black & broken) offered price plus (+) 50 to 60 USD / ton (term May 2021), compared with +40 to + 50 USD / ton a week ago.
Meanwhile, in Lampung (the coffee capital of Indonesia), Robusta coffee is offered at a higher price of 230 – 240 USD / ton compared to the reference contract in London, an increase of 10 USD / ton compared to a week ago; May futures contract 250 USD / ton higher than the international reference price, more than +250 USD / ton last week.
The reason for the increase in Asian coffee prices is due to the rise in prices on the London floor, and it is predicted that the global coffee market in the 2021/22 crop year will fall into a shortage.
On the London floor, ending the session 10/3, Robusta coffee contract reference price increased by 10 USD / ton compared with the previous session, to 1,410 USD / ton.
The trend of world coffee prices has been going on for many months now. On the floor of New York, arabica coffee within a month has increased about 9%. Coffee price index of the International Coffee Organization (ICO) in February 2021 increased by 3.1% over the same period of the sow year, reaching 119.35 US cents / lb, due to the prices of all ingredients in the The numbers all increased. This is the highest monthly average price since October 2017, when the ICO’s price index was 120.01 US cent / lb.
According to Customs data, Vietnam’s coffee exports in February 2021 decreased by 23.5% compared to January 2021, to 122,833 tons. Generally in the first two months of 2021, Vietnam exported 271,000 tons of coffee, down 18.5% over the same period last year, reaching 473 million USD (down 15.8%).
According to the International Coffee Organization (ICO), global coffee production in the 2020/21 crop is estimated to increase 1.9% to 171.9 million bags, of which arabica increases by 5.2% to 101.88 million bags. . Coffee consumption in this crop year also increased by 1.3% to 166.63 million bags, due to the social stretch in many places, reducing coffee consumption in pubs, in the context of a slow global economic recovery. . The world coffee surplus in the 2020/21 crop year, according to ICE’s calculations, is about 5.27 million bags due to a stronger increase in supply than demand. Meanwhile, according to brokerage firm Marex Spectron, the surplus amounted to 8.4 million bags.
The coffee market in 2021/22 will have a shortage of more than 10 million bags
The world coffee market in crop year 2021/22 is forecast to turn from surplus to shortage. Broker Marex Spectron forecasts a shortage next year to 10.7 million bags due to a sharp drop in Brazilian output. However, according to Marex, the supply of arabica coffee next season will be 12.1 million bags lower than demand, but the robusta supply will exceed 1.4 million bags of demand.
Specifically, Marex forecasts that Brazilian arabica coffee output in crop year 2021/22 will plummet to 32.8 million bags, compared with 50 million bags of the previous crop, due to entering a low leveling cycle. But contrary to Arabica, Brazil’s Robusta output next season will increase to 20.8 million bags, compared with 19 million bags of the previous season.
Marex’s prediction figures differ from those forecasted by a consulting firm and another forecast, StoneX. StoneX also forecasts that Brazilian coffee production in 2021/22 will decline sharply but as a result will be at 51.4 million bags; of which 31.4 million bags of arabia (down 33% compared to the previous season), but robusta increased 11% to 20 million bags.
Reference: Refinitiv
