After reducing under VND30,000/kg in the middle of May, coffee price increased again and especially sharply in last week. Raw coffee is predicted to continuously increase in this week.
Taking care of coffee in Lam Dong
In last week, raw coffee price in Central Highland provinces sharply increased with the increase level of VND2,100 – 2,200/kg that brought raw coffee price in this area up to VND33,200 – 33,900/kg. Until the early of this week, raw coffee price in Dak Lak has been back to the level of VND34,000/kg.
Mr. Nguyen Quang Binh, a coffee market analysist, notified that in beginning of this week, the price level of VND 34,000 – 34,200/kg was offered. Thus, in this week, the raw coffee price in Central Highland may continue to increase and stay at VND34,500 – 35,000/kg.
The reason of the re-increase of Vietnamese raw coffee price firstly is the impact of the international coffee market. In last week, prices of all 4 Robusta sessions at London Exchange were increased. In total, Robusta price for July delivery increased USD110/Mt at the level of USD1,498/Mt, traded volumes were over average level. In accordance with some coffee experts, Robusta price increased USD110/Mt only with 4 sessions.
In New York market, Arabica price also increased in all 4 sessions in last week. In total, Arabica price for July delivery increased 11.5 cent (equivalent to 12.03%) at the level of 97.1 cent/lb. The traded volumes of Arabica were also over average level.
According to some coffee experts, the fact that Robusta price in London Exchange increased USD110/Mt and Arabica price in New York Exchange increased 11.3cent/lb was rare.
What made coffee price strong increase again? In term of production, the biggest coffee producing country Brazil faced difficulty in harvest because of heavy rain in main coffee areas in its Southeast. In addition, Brazilian Real increased in comparison with USD that dropped its profits; thus, Brazilian farmers were not encouraged to sell raw coffee. Besides, there were some new forecasts that Brazilian coffee yield would decrease in comparison with previous forecasts. In detail, INTL FCStone Corp. assumed that Brazilian coffee yield would be 15.9% lower than the previous crop with total 53 million bags, including 36.9 million bags of Arabica and 16.1 million bags of Conilon Robusta.
However, the production and harvest of coffee in Brazil is assumed not to impact on the international coffee. The main reason is trade wars between big economies.
As estimated by the Ministry of Industry and Trade, exported coffee volume of Vietnam in May 2019 was 135 thousand Mts equivalent to USD220 million, decreasing 13.1% by quantity and 27.8% by value in comparison with May 2018. Accumulation of the first 5 months of 2019, exported coffee reached 767 thousand Mts, equivalent to USD1.313 billion, reducing 13.1% by quantity and 23% by value in comparison with the first 5 months of 2018.
By SON TRANG (Nong Nghiep News)
