Vietnam Robusta prices soar again as markets await Brazilian and Indonesian harvest season coffee supplies

Recently, the Coffee and Cocoa Association of Vietnam reported that prices of Robusta in Vietnam have soared due to falling local production in Vietnam, increased demand for Robusta coffee, drought in Brazil and geopolitical problems. The price of raw coffee in the Central Highland is expected to be 85 million to 87 million dong / ton, compared with an earlier price of 83 million to 85 million, breaking the record again.

But as April approaches, the picking season for robusta coffee in Brazil and Indonesia is ready to begin. Market supply is expected to improve. In the past, Brazil's Robusta was mainly used for domestic consumption and processed into instant coffee exports, but recently, due to production cuts in Vietnam and Indonesia and soaring international prices, Brazil's Robusta beans exports have increased sharply.

Moreover, due to the continuing crisis in the Red Sea and the continued armed attacks near the Strait of Mande, which connects the Red Sea and the Gulf of Aden, most shipping companies have suspended or diverted their vessels from the Red Sea and the Suez Canal to the Cape of good Hope, which has seriously affected Eurasian routes, so traders have turned to Brazil to buy Robusta.

And earlier, Brazil has rapidly expanded the planting area of coffee trees, and the production of Robusta beans in Brazil has increased, but during this period due to the bad weather caused by El Ni ñ o, the market expects that Brazil's Robusta coffee production will be reduced by about 5% to 10% in 2024 / 25, and Robusta is expected to produce 22.5 million bags without bags and 60 kg.

In addition, the new production season of Indonesian Robusta coffee will begin in April, and the market is expected to produce 10.5 million bags in 2024 in 25, up from 9.7 million bags in the previous year. But experts at the Indonesian Coffee and Cocoa Research Center say El Ni ñ o can have devastating consequences for low-altitude growing areas and forests, while Robusta mostly grows in low-altitude areas. and Indonesian coffee production in January in Sumatra fell 79% from the same period last year. And the data show that Indonesia's domestic coffee consumption has increased significantly in recent years, so exportable coffee will be reduced.

To sum up, although the price of coffee in Vietnam has risen, traders have stepped up their efforts to buy coffee beans in order to protect stocks. According to local traders in Vietnam, demand is high, but supply is tight, and because of earlier incidents in which farmers refused to honor their contracts, they were very cautious in trading, making it more difficult to purchase. But at present, the market still hopes that coffee beans from Brazil and Indonesia can increase supply and slow down market demand.