Coffee Prices Drop in Early November as Brazil Increases Supply and Market Supply Recovers Gradually – What’s Next for Prices?
Global coffee supplies are gradually recovering after two years of a sharp deficit. The ICO estimates that the market surplus for the 2023-2024 season will reach about 100,000 tons. However, in the previous season (2022-2023), the global supply shortage reached around 300,000 tons, while the season before saw a record deficit of 516,000 tons.
Global Coffee Prices See Sharp Fluctuations
Global coffee prices fell sharply in the first trading session of the week after a slight increase in the previous session. In Vietnam, local prices temporarily halted their decline at the end of October before continuing to drop. Throughout October, prices fell by about 14,000 VND per kilogram.
Persistent Price Fluctuations in Coffee Markets
In recent days, coffee prices have experienced significant fluctuations, with prices rising and falling. One of the main reasons is Brazil’s recent increase in Conilon (Robusta) coffee exports to take advantage of high prices. Brazil, the world’s largest coffee producer, is expected to produce approximately 3.6 million tons in the 2024-2025 season, a 4.8% increase from the previous season, thanks to a 3.6% increase in productivity and a 1.2% increase in cultivation area, according to Brazil’s Institute of Geography and Statistics (IBGE). Prices also declined following news of rainfall in Brazil.
The Brazilian crop is expected to yield about 2.5 million tons of Arabica, an increase of 6.5%, and around 1.06 million tons of Conilon, 0.5 to 0.6 million tons less than Vietnam, due to a 3.3% decrease in cultivated area and a 1.1% decrease in productivity.
Increase in Brazil’s Coffee Exports
During the first two months of the 2024-2025 season (July and August), Brazil’s coffee exports totaled approximately 451,000 tons, an increase of nearly 12% compared to the previous season. Export revenues reached nearly USD 1.9 billion, a 39% increase. Robusta coffee exports accounted for about 110,000 tons, a 53% rise; Arabica exports reached 294,000 tons, an increase of 2.5%; and the remainder was instant coffee, according to the ICO.
Supply and Demand Forecasts
Coffee supplies are gradually recovering after two consecutive years of record deficits, according to the ICO. The ICO expects global coffee production for the 2023-2024 season to reach 10.68 million tons, a 5.8% increase from the previous season. Arabica production is expected to rise by 8.8% to 6.13 million tons, while Robusta production will increase by only 2.1%, reaching 4.53 million tons. On the other hand, global coffee consumption is projected to rise by 2.2% in the 2023-2024 season, reaching 10.6 million tons.
October Price Fluctuations
On October 31, local coffee prices in Vietnam rose by 600 VND per kilogram in some key purchasing regions, according to local sources.
According to reports from the World & Vietnam, Robusta prices on the ICE Futures Europe in London fell, with the January 2025 contracts dropping by USD 84 to USD 4,369 per ton, and March 2025 contracts falling by USD 82 to USD 4,281 per ton, with low trading volume. Arabica prices on ICE Futures US in New York also declined, with December 2024 contracts down 3.7 cents to 245.90 cents per pound, while March 2025 contracts decreased by 3.55 cents to 245.5 cents per pound, with high trading volume.
Vietnam’s Market Performance and Expert Forecasts
Reports indicate that local coffee prices in Vietnam are currently around 100,000 VND per kilogram, compared to over 125,000 VND per kilogram two months ago. Among the main reasons for this decline is the abundant supply with the beginning of Vietnam’s coffee harvest season.
Additionally, the European Commission proposed delaying the implementation of new import regulations for agricultural products by 12 months, reducing pressure on prices.
According to experts from the Vietnam Coffee and Cocoa Association (VICOFA), prices are expected to decline in the short term due to the changes in supply and demand. The association reported that Vietnam’s coffee exports for the past crop season amounted to about 1.45 million tons, primarily Robusta, generating revenues exceeding USD 5.4 billion. Despite a 12.7% decrease in production, the total export value rose by 33% due to the increase in global coffee prices.
This export revenue is the highest in Vietnam’s coffee export history, with Vietnamese coffee being exported to over 80 countries worldwide. Europe accounts for 48% of the market, followed by Asia at 21%, and the Americas at 6%.
