MILAN – Crop concerns for the 2024/25 harvest season in Brazil and Vietnam continue to fuel the upward trend in the coffee futures markets, with the logistics crisis and the very low level of world stocks acting as additional catalysts. Yesterday, Thursday 11th April, London soared to new all-time highs, while New York reached its highest levels since October 2022.
May Ice Robusta skyrocketed to an intraday high of $3,906 yesterday and closed at $3,843 (+$66), a new 10-T contract record. The most active contract for July delivery earned 75 dollars closing at 3,790 dollars.
New York coffee futures saw their third consecutive session in the black. The contract for May delivery gained 570 points to settle at 220.35 cents per lb, the highest level for the front month since early October 2022.
The most active contract for July delivery rose 470 points to end the day at 217.35 cents.
Domestic prices in Vietnam are reaching new unprecedented levels.
According to Thai Nhu Hiep – Director of Vinh Hiep Company Limited and Vice Chairman of VICOFA, the influential Vietnamese coffee and cocoa association – “prices are ranging from VND105,000 to VND110,000 per kg ($4.2-$4.4), possibly even reaching VND120,000 per kg.
Continuous price hikes are undesirable, so measures must be implemented to stabilize prices for the benefit of all stakeholders,” he said, speaking during the expanded Executive Committee meeting of VICOFA.
Do Ha Nam, Chairman of the Board of Directors of Intimex Group, raised concerns about the rapid increase in coffee prices and coffee excessively high price levels which have resulted in “intense competition and contract breakdown, tarnishing the reputation of the Vietnamese coffee industry”.
A representative from Nestle Vietnam added that the inability to procure coffee due to extremely high prices has compelled their company to seek supplies from other countries to maintain smooth factory operations.
In 2023, Nestle Vietnam diversified its sourcing, and this year, they are forced to continue the practice to ensure uninterrupted production.
In Colombia, the National Federation of Producers confirms that the 2023/24 (October-September) crop is expected to be around 12.6 million bags.
Despite an increase of 15.5% compared to the previous coffee year, this level of production is still well below the country’s production potential and from the historic averages reached in the late 2010s.
Exports, on the other hand, are expected to reach 10.8 million, still 12.5% higher than in 2022/23.
