MILAN – Unfavourable weather conditions in Vietnam helped boost coffee futures prices in the first session of the year. In London, the main Ice Robusta contract closed yesterday, Thursday, Jan. 2, 2025, up $181, at $5056, a 1-1/2 week high. Strong gains were also recorded in New York, where the benchmark gained 710 points, to settle at 326.85 cents.
Persistent rain in the Central Highlands, Vietnam’s top Robusta coffee producing area, is hampering the harvest and processing of the beans, which are already behind schedule.
“The continuous rainy weather also affects bean quality as they cannot be dried and stored properly,” said a local source quoted by Reuters.
According to the same source, 20% of beans remained unpicked. Meanwhile, new updated export figures from Vietnam’s General Department of Customs show that shipments fell by 47% to 63,019 tonnes in November.
During the first 11 months of calendar year 2024, exports fell by 14% to 1.22 million tonnes (20.33 million bags).
The continuation of unseasonal rains has led most forecasters to anticipate a lower year on year export performance for the month of December, which will shortly be released by the Vietnam Customs Authority, reports I. & M. Smith.
“There is some anticipation that export flow may start to improve as the new year progresses with perhaps the interruption of Tet Lunar New Year celebrations to come at the end of January.
The cumulative production and forecasts for the delayed but progressing harvest, may inspire lower crop estimates to come to the fore. While estimates vary by a margin of 3 million bags, the median estimate for the October 2024 to September 2025 coffee year is set at 28 million bags” concludes I. & M. Smith.
It should be noted, however, that 2024 was actually a golden year for Vietnam’s coffee exports, which reached unprecedented levels in terms of value.
Coffee export earnings are expected to surpass the $5 billion mark, even approaching the value of rice exports.
According to Leonardo Rossetti, analyst at StoneX, the prospects for the current year are good, despite the current difficulties.
Vietnam’s coffee harvest will be good, while the Brazilian Robusta crop promises to be a record one. “We believe that the Robusta variety will be increasingly present in international markets,” Rossetti concluded.
