Reducing both volume and worth, coffee exports continue to struggle due to Covid-19

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From the beginning of the year to the end of August 15, Vietnam's coffee exports reached 1.01 million tonnes, worth US$1.87 billion, down 8.2% in volume and 0.1% in worth. Photo: Nguyen Thanh

According to the Agency of Foreign Trade (Ministry of Industry and Trade), in the first 15 days of August, the complex developments of the Covid-19 pandemic in the southern provinces affected Vietnam's coffee exports.

Coffee exports decreased by 16.7% in volume and 12.7% in worth compared to the first 15 days of July; decreased by 9.9% in volume and equivalent in worth compared to the first 15 days of August 2020, reaching 47.14 thousand tonnes, worth US$92.89 million.

From the beginning of the year to the end of August 15, Vietnam's coffee exports reached 1.01 million tonnes, worth US$1.87 billion, down 8.2% in volume and 0.1% in worth compared to the same period in 2020. It is forecast that Vietnam's coffee exports in the coming time will still be negatively affected by the fourth wave of Covid-19 in the country.

Regarding export prices, the Agency of Foreign Trade informed that in the first seven months of 2021, Vietnam's average coffee export price reached US$1,846/tonne, up 8.6% compared to the first seven months of 2020. In which, the average export price of Vietnam's coffee to most key markets increased.

In the first seven months of 2021, coffee exports to some key markets decreased, but exports to China increased sharply compared to the same period last year.

On the world market, in mid-August, coffee prices increased again. Information about dry weather in southern Brazil and transportation difficulties led to a decrease in inventories in many main consuming markets, which increased prices in the world coffee market.

Per estimates, Brazil has harvested more than 89% of new coffee production, reaching 50.45 million bags, including 21.1 million bags of Robusta coffee and 29.22 million bags of Arabica coffee, slower than the average five-year average. Thus, the Robusta coffee crop is almost completed, while the Arabica coffee crop has about 5.98 million bags still harvested.

According to the Council of Coffee Exporters of Brazil (Cecafe), the country's coffee exports in July, the first month of the 2021/2022 crop year, fell 12.8% compared to July 2020, down to 2.8 million bags. In the first seven months of this year, exports reached 23.737 million bags, up 2.2% over the same period last year.

It is forecast that the increase in global coffee prices will slow. The supply of Robusta coffee is replenished; while the market is concerned that demand will slow down due to the spread of a new virus strain that causes many countries to re-establish stronger social distancing.

Besides, Brazil's weather is forecast to be favourable from the beginning of September. This will restrain the price increase of coffee.

On the London exchange, on August 18, the price of coffee delivered for September 2021 and November 2021, respectively, increased by 5.5% and 5.2% compared to August 9, 2021, to US$1,839/tonne and US$1,845/tonne; for delivery in January 2022 and March 2022, respectively, increased by 4.9% and 4.7% compared to August 9, 2021, to US$1,841/tonne and US$1,839/tonne.

On the New York Stock Exchange, on August 18, the price of Arabica coffee for delivery in September 2021 and November 2021 increased by 1.7% and 1.6% respectively compared to August 9, 2021, up to 178.95 US cents per pound and 182 US cents per pound; futures for delivery in March 2022 and May 2022 increased by 1.7% and 1.5% respectively compared to August 9, up to 184.75 US cents per pound and 185.7 US cents per pound.

On the BMF exchange of Brazil, on August 18, 2021, the price of coffee delivered for September 2021 and December 2021 futures increased by 0.5% and 1.7% respectively compared to August 9, 2021, up to 211.8 US cents per pound and 220.25 US cents per pound; for delivery in March 2022 and May 2022, Arabica coffee prices increased by 1.4% and 1.7% respectively compared to August 9, 2021, up to 224.65 US cents per pound and 223.3 US cents per pound.

At the port of HCM City, export-grade 2 Robusta coffee, 5% black broken rate, traded at the price of US$1,896/tonne, an increase of US$96/tonne (equivalent to an increase of 5.3%) compared to August 9.