Import and Export Department (Ministry of Industry and Trade) said, in the first 10 days of April 2020, the price of Robusta coffee delivered in maturity fluctuated inconsistently, while the price of Arabica coffee increased.
The Covid-19 pandemic has severely affected the global coffee market. Due to disease concerns and oversupply, long-term Robusta coffee prices decreased, while short-term prices increased slightly due to transportation difficulties. Meanwhile, the price of Arabica coffee increased mainly due to difficulties in shipping. Residents are required to stay at home, resulting in a shortage of labor. In key production areas such as Central and South America, coffee harvest has not been mechanized yet. Meanwhile, the coffee harvest begins in April, peaking in May, but people around the world are being advised to stay at home, many restaurants to close to limit the spread of the disease. Based on the evolution of the Covid-19 epidemic, the Import and Export Department forecasts that the global coffee market will face difficulties at least until mid-2020.
In Colombia, a 19-day nationwide blockade applied from March 25, 2020 affects the country’s coffee harvest time starting April. According to the Federation of Colombian Coffee Growers, production The country’s coffee is estimated to increase 1.7% in crop year 2019/20, reaching 14.1 million bags, of which 6.6 million bags have been harvested as of February 2020, 8.8% higher. compared to February 2019 due to the strong growth from the beginning of the season.
According to Reuters, the weather report said coffee growing areas in northern Brazil would experience prolonged heavy rains that could delay agricultural activities.
In China, an outbreak in the first 2 months of 2020 has seriously affected the global Robusta coffee market. China is the 11th largest coffee importer in the world, with an estimated import of 2,650 thousand bags, worth $ 9,124 million in the 2019/20 crop. In which, Robusta coffee import ranked third in the world, estimated at 1,500 thousand bags. Coffee is gradually becoming a familiar drink with Chinese consumers. This is considered a large potential market, attracting many coffee companies to expand their chain stores such as Starbucks or Luckin Coffee. However, compared to other major coffee consuming countries, the Chinese market is at an early stage of development, consumers mainly use instant coffee. The Covid-19 translation forced Starbucks to close more than 2,000 stores in China by the end of January 2020. As of March 5, 2020, more than 90% of Starbucks stores in China are back online.
Meanwhile, the Covid-19 epidemic is complicated globally, especially in Europe and America, two major coffee import and consumption markets in the world. This will inevitably cause a decline in global coffee imports due to a deep drop in consumption. Meanwhile, the output of coffee crop year 2020/21 of Brazil will end in September 2021 is expected to be cyclical, so the market is likely to experience oversupply, causing pressure. force on coffee prices.
According to Statista – a channel of statistics, research and forecast of the global trade situation, in the world, on average, up to 75% of coffee consumed in restaurants, consumed at home is only 25%. Due to concerns about the Covid-19 epidemic, many people at home and a series of coffee shops closed, causing the consumption of this item to plummet in China because the Chinese do not have the habit of drinking coffee at home. love to enjoy coffee at the store.
The Covid-19 pandemic is generally under control in China, and import demand will recover. In addition, concerned about the lack of material supply in the coming time, coffee importers in some major consuming countries are stockpiling in order to prevent a shortage of supply due to the Covid-19 epidemic causing disruption to the supply chain. application. According to statistics, the amount of coffee stored in the warehouse system of the ICE intercontinental floor fell sharply, affecting the price of Arabica coffee increased.
Currently, Arabica coffee supplies in producing countries such as Guatemala, Honduras are scarce, until May or June after harvest, the new supply can be plentiful. Meanwhile, Colombia started the coffee harvest season and received a lot of orders for spot delivery, but the shipping capacity was limited and had difficulty due to the blockade.
In the long term, global coffee supply is forecast to be plentiful. Major coffee producing countries are forecasted to reach a record high. Brazil’s coffee production is forecast to reach 67 to 69 million bags in crop year 2020/21, far exceeding the record level of 64.8 million bags in crop year 2018/19. Coffee productivity of Vietnam in crop year 2020/21 is forecast at a high level.
