Domestic coffee prices
The domestic coffee market this morning, April 24, recorded very strong growth momentum, helping the soybean kernel price approach the important milestone of 9,000 VND/kg. According to actual surveys, the average purchase price throughout the Central Highlands region has increased by 1,500 VND/kg, bringing the price level to the threshold of 89,400 VND/kg.
In Dak Nong province (old), coffee prices are trading at the highest level in the region at 89,500 VND/kg. Dak Lak and Gia Lai provinces both maintain stable prices at 89,300 VND/kg, while Lam Dong region is listed at 88,700 VND/kg. This is the second consecutive increase session in the week, reflecting the heat from the world futures market that is directly affecting domestic trading sentiment.
World coffee prices
In the international market, both the London and New York exchanges recorded strong breakthrough sessions, reaching the highest level in the past 4 weeks. Specifically, Robusta prices on the London exchange for July delivery jumped 103 USD, equivalent to 3.03%, closing at 3,507 USD/ton.
On the New York exchange, the price of Arabica for July delivery also exploded when it increased by another 11.20 cents, equivalent to 3.87%, officially exceeding the 300.35 cent/lb mark. The main driving force pushing prices up is deep concerns about the prolonged closure of the Strait of Hormuz due to geopolitical tensions. The paralysis of this vital sea route not only increases transportation and insurance costs but also pushes up fertilizer and fuel prices, directly putting pressure on the input costs of roasters.
Coffee price assessment
Coupled with geopolitical factors, the strength of the Brazilian Real also played a key role when it rose to its highest level in 2 years against the USD. The strengthening domestic currency has caused manufacturers in Brazil to limit export sales to wait for better prices.
In addition, the actual shortage of Robusta supply is becoming serious as inventories on the ICE exchange continue to fall to the lowest level in the past 16 months. In terms of weather, a report from Minas Gerais of Brazil shows that rainfall last week only reached 4.2 mm, equivalent to 20% of the historical average, this factor is directly threatening crop yields and promoting the buying wave of hedge funds.
However, the market still faced some resistance from record surplus forecasts from international organizations. Marex Group and StoneX still maintained their assessment of a "super bumper" harvest in Brazil next crop with output possibly reaching 75.9 million bags.
At the same time, Vietnam's Q1 export data increased by 14% to 585,000 tons, showing that the supply of goods from the world's number one Robusta producer is still being maintained well. It is forecasted that in the coming sessions, coffee prices will continue to fluctuate strongly when approaching the 9,000 VND/kg zone.
Domestic coffee prices may change depending on the region and product quality at the time of transaction.
