The robusta coffee market is bustling again with the comeback of two big producers – Brazil and Indonesia. However, the supply prospects of the two countries are giving an opportunity to Vietnam to boost exports and cement its top position.
According to the Mercantile Exchange of Vietnam (MXV), the closing robusta price on ICE London on April 10 was $2.299 per ton, an increase of 20 percent compared with $1.926 per ton earlier this year. The product was once traded at over $2,300 per ton, a 7-month high.
Pham Quang Anh, director of the Vietnam Commodity News Center, said the rapid increase in price since the beginning of the year was mostly due to the market’s fear of shortages.
The high prices at present offer great advantages to Vietnam to boost exports.
The coffee output in Brazil, the second largest exporter, has fallen by 3.8 percent compared with 2022 to 17.5 million bags, according to Conab.
Most recently, the International Coffee Organization (ICO) reported that the world coffee market is expected to see a deficit of 7.27 million bags in the current crop, with a 2.1 percent decline of robusta output compared with the previous crop.
Farmers in major export countries are mulling whether to sell coffee for fear of shortages. Meanwhile, ICO has predicted demand for coffee will grow by 1-2 percent per annum.
Indonesia has begun harvesting a new crop with an expected 9-year record low output, prompting farmers to restrict exports.
The country exported 27,022 tons of coffee in the first two months of the year, a sharp fall from the 37,666 tons of the same period last year, according to the Indonesian government.
The same situation is occurring in Brazil. The country had just begun harvesting when rain unexpectedly returned to the southeastern part.
Analysts say the two big exporting countries won’t threaten Vietnam’s exports. This is an advantage for Vietnam amid farmers’ fear of low output.
Though the world’s economy remains unstable after macroeconomic upheavals, analysts believe demand for robusta may increase.
With lower prices, robusta has advantages over arabica beans. The strong rise of robusta is partially reflected in exports from Vietnam, the biggest supplier with 36 percent of the global output of robusta.
Vietnam exported 210,372 tons last March, up 5.2 percent over February, and higher than the 142,544 tons in January, according to the General Department of Customs (GDC).
Though exports last month slightly decreased by 0.12 percent over the same period last year, export value grew well, reaching $482.4 million, higher than the $474.4 million in March 2022.
Viet Nam Net
