Arabica coffee grown in Kon Tum Province. Coffee prices in the domestic market reached a new record last week. — VNA/VNS Photo Dư Toán

HÀ NỘI — The price of Robusta coffee in February increased sharply in the domestic market because coffee demand has remained at a high level, according to the Import-Export Department, Ministry of Industry and Trade.

Việt Nam's average coffee export price in February reached US$3,276 per tonne, up 7.4 per cent against the price in January and up 50.6 per cent compared to the same period of last year.

In the first two months of 2024, the price stood at $3,153 per tonne, up 44.7 per cent over the same period in 2023.

According to the Việt Nam Commodity Exchange (MXV), closing the trading session on March 11, the coffee prices decreased by 0.11 per cent for Arabica and 0.35 per cent for Robusta. The fluctuation of the US Dollar and Brazilian Real (USD/BRL) exchange rate and positive signals from supply caused coffee prices to fluctuate during the session, the Công thương (Industry and Trade) newspaper reported.

The stronger increase in Brazil's Real has dragged down the USD/BRL exchange rate by 0.02 per cent, causing Brazilian farmers to limit coffee sales.

On the other hand, Arabica inventories are increasing, putting pressure on prices. At the end of the session on March 8, the total amount of Arabica coffee stored at certified warehouses of the Intercontinental Exchange (ICE) increased by 13,875 60-kg bags to 424,752 bags, the highest level in the past four months.

With Robusta, concerns about supply shortages have somewhat eased with rain forecast to reappear in Việt Nam's main coffee growing region.

Furthermore, Robusta coffee inventory on ICE at the end of the session on March 7 grew by 290 tonnes, bringing the total amount of coffee stored at certified warehouses of ICE to 24,320 tonnes.

Coffee prices in the domestic markets of Việt Nam and Indonesia reached new records last week, due to low inventories and very high demand.

The price was pushed up to very high levels at $500-550 tonne for grade-2 Robusta coffee, and at $750 - 800 per tonne for grade-4 Sumatra coffee.

The Ministry of Agriculture and Rural Development said that the main reason for the increase in Robusta coffee export prices was concern about supply shortages.

Hot weather in key coffee growing areas has made many importers worried about the prospect of a low supply of Robusta coffee for the new crop, because Việt Nam is the world's largest Robusta exporter.

It is forecast that Việt Nam's coffee output in the 2023-2024 crop year may decrease by 10 per cent to about 1.66 million tonnes, the lowest level in four years, due to drought.

In February, Việt Nam's coffee exports reached 200,000 tonnes, worth US$655 million, down 0.2 per cent in volume but up 50.3 per cent in value compared to the same period of last year.

In the first two months of 2024, Việt Nam's coffee exports were estimated to reach 438,000 tonnes, earning $1.38 billion, an increase of 27.9 per cent in volume and 85 per cent in value compared to the same period in 2023.

Regarding kinds of coffee, in January 2024, Việt Nam increased exports of Robusta and Arabica coffee compared to December 2023, but decreased exports of Excelsa and processed coffee.

According to the General Department of Customs, in January, Việt Nam exported 216,380 tonnes of Robusta coffee, worth $613.6 million, increasing 15.4 per cent in volume and 25.7 per cent in value compared to December 2023. The exports increased by 68 per cent in volume and 155.7 per cent in value year on year.

Việt Nam promoted the export of Robusta coffee to many markets, such as Italy, Spain, Russia, Indonesia, Belgium, China and the Philippines. Meanwhile, exports of Robusta coffee to some traditional markets decreased, including Germany, Japan and America.

Việt Nam's Arabica coffee exports reached 5,250 tonnes in January, earning $20.15 million, an increase of 78.5 per cent in volume and 83.1 per cent in value compared to December 2023. However, the exports fell by 27.1 per cent in volume and 25.7 per cent in value compared to the same period of last year.

The Arabica coffee exports recorded high growth to many markets, such as the US, Japan, Indonesia, the Philippines and Russia. —VNS