Domestic coffee prices
Last week, domestic coffee prices closed at VND 113,800/kg, reflecting the strong price decrease of the last trading session.
After a week, domestic coffee prices have decreased by a total of VND3,100/kg in the past week, almost completely erasing the recovery results after the collapse in mid-September.
This decrease came from two consecutive sessions of decline in the middle of the week, after which the market fluctuated and could not find strong demand at the end of the week.
The domestic coffee market has gone through a dramatic month and a half, divided into three main spans: The first span was at the end of August, when prices reached 122,000 VND/kg due to supply concerns. The second step was the mid-September crash, pulling prices down to 111,400 VND/kg. The third phase is the macro adjustment period (early October), when prices are under selling pressure due to the FED cutting interest rates and Vietnam's export information increasing. In conclusion, coffee prices have decreased net by VND 8,200/kg compared to the peak at the end of August.
World coffee prices
World coffee prices ended the week with a sharp decline, especially Robusta lost up to 86 USD/ton in the last trading session.
Robusta and Arabica - both types of coffee are under pressure to liquidate their positions. The reason is the conflict between rainfall news in Brazil (reduced concerns about drought, putting pressure on Arabica) and the report of increased exports from Vietnam ( putting pressure on Robusta).
The sharp decrease in prices is the result of investors simultaneously selling due to improved macro factors and actual supply, despite long-term price support factors.
Coffee price forecast
The coffee market is in a state of extreme conflict. The downward pressure on prices mainly comes from the liquidation of funds and abundant information on actual supply sources, such as Vietnam's Robusta output expected to increase by 6%.
However, factors supporting long-term prices are still strong and are keeping prices at the current level. That is record low Arabica inventories (expected deficit of 8.5 million bags) and customs pressure has not been resolved.
Coffee prices are expected to continue to fluctuate strongly next week. The market may be looking for a more stable price threshold to stand firm, with the possibility of a recovery if new information about weather risks in Brazil increases again or international inventories fall further.
