MILAN — Coffee futures fell down at the turn of the month. On Friday, 1 November, both exchanges closed in negative territory for the second consecutive day, pushed down by weather updates from the world’s two largest producers. Also contributing to price pressure was the performance of the real, the Brazilian currency, at its lowest level against the dollar in more than two and a half months.
In New York, the contract for December delivery lost 295 points to end the week at 242.95 cents, 545 points (-2.2 percent) below the close of Friday, 25 October and 940 points below the weekly high of 252.35 cents recorded on Monday 28 October.
Ice Robusta’s futures contract for January delivery fell $90 to settle at $4,279, down $132 (-3%) from the previous Friday.
London also reached its weekly highs on Monday 28 October, when the main contract closed at $4,502.
In Vietnam, Tropical Storm Trami briefly touched down in central Vietnam, but the coffee harvest, now only 5% complete, escaped largely unscathed, subtly affecting local coffee prices.
Traders offered 5% black and broken-grade 2 robusta COFVN-G25-SAI at a discount range of $10-$30 per ton to the January contract, report local sources.
Vietnam’s coffee production this year (Arabica+Robusta) is expected to be around 26-27 million bags, below the USDA’s initial estimate of 29 million bags compiled in May, when the impact of the drought was not yet fully assessed.
According to Safras & Mercado, the rise in Robusta prices is prompting Vietnamese growers to expand acreage and improve farm management.
A few years ago, when prices were less than half than today, coffee growing had lost ground to pepper and durian.
The trend has reversed in the last two years. According to Vicofa, the total area under coffee had risen to 718,000 hectares at the end of 2023 and is expected to expand further by the end of 2024.
If the weather is more favourable next year, the larger areas and the increased productivity made possible by higher investments in agricultural inputs should favour a significant recovery in production beginning from the 2025/26 harvest.
