According to the Import-Export Department (Ministry of Industry and Trade), in January 2023 the price of Robusta coffee on the global market increased sharply compared to the end of 2022, reaching the highest level in 3 months. This is because funds and speculators are buying into contracts that recently sold off heavily.

Also, positive US economic index reports generally supported most commodity markets as they speculated that the US Federal Reserve (Fed) may slow rate hikes.

In addition, the price of Robusta coffee increased thanks to the information that stocks have decreased. As of 25 January 2023, ICE London’s standard inventory dropped to 62,520 tonnes.

Also in January 2023, the price of Robusta coffee in Vietnam rose sharply compared to the world market price. On January 28, 2023, the price of Robusta coffee increased from VND 3,000 to 3,100/kg compared to December 30, 2022. In Lam Dong and Dak Lak provinces, the price of Robusta coffee also increased by VND 3,100/kg to VND 42,200-42,800/kg; In Gia Lai and Dak Nong provinces, the price of Robusta coffee also increased by VND 3,000/kg to VND 42,800/kg.

According to the Import and Export Department, world coffee prices will continue to recover due to continued growth in global coffee consumption as demand recovers from the Covid-19 pandemic and global inflation will ease due to the impact of the pandemic, which is how most central banks manage monetary interest rates of the world. However, there are very different forecasts about supply – demand in the world coffee market.

According to the US Department of Agriculture (USDA), global coffee production is expected to increase by 6.6 million bags to 172.8 million bags in the 2022/2023 crop. Mainly because Brazil’s Arabica coffee trees are going into a good year according to the two-year production cycle. Brazilian Arabica production is expected to increase by 3.4 million bags to 39.8 million bags.

Brazil’s robusta coffee crop will also reach a record 22.8 million bags in the 2022-2023 crop, according to the USDA, an increase of more than 1.1 million bags compared to the previous crop. Robusta coffee production in Brazil has increased significantly thanks to favorable weather conditions and well-executed crop management that has supported the formation and development of coffee berries in the main growing region of Espirito Santo state. In addition, a slight increase in harvested area also contributes to the expected increase in Robusta.

While global coffee production is expected to increase sharply, the USDA estimates that global coffee consumption will increase by just over 800,000 from 167.9 million bags in crop year 2022-2023, with the increase primarily in the European Union, the United States and Brazil is recorded. Based on this, the USDA projects that global coffee supply will exceed demand by 4.1 million bags in crop year 2022-2023.

Meanwhile, the International Coffee Organization (ICO) kept its forecast for global coffee production in crop year 2022-2023 at 167.2 million bags, down 2.1% from 170.8 million bags in the previous crop year. While global coffee consumption is expected to increase by 3.3% to 170.3 million bags in the 2022-2023 crop compared to 164.9 million bags in the 2020-2021 crop. According to the ICO, coffee consumption is expected to exceed production by 3.1 million bags.

According to Volcafe, global robusta coffee production is expected to show a record deficit of 5.6 million bags in the next crop year (2023/2024) as the third largest robusta producer, Indonesia, is badly damaged by heavy rains, which will reduce the country’s robusta -Coffee production to 9.1 million bags.

Therefore, some Vietnamese coffee industry experts believe that the price of Robusta coffee will fluctuate in the direction of increasing fluctuations in the near future. But Vietnamese companies need to be wary of the possibility that speculators will return to shorting the market, thereby having a significant impact on coffee prices.

Mr. Luu Van Khang of the Vietnam Trade Office in Mexico said that Mexico is the world’s largest coffee consumer, averaging 1.7 kg/person/year. About 84% of Mexican households use instant coffee. Mexico is a large coffee producer, but mainly grows Arabica coffee, so traders in this country have to import a large amount of Robusta coffee in order to produce raw materials for the production of instant coffee. Therefore, Mr. Khang said, in addition to exporting green coffee, Vietnamese coffee companies could also export instant coffee to this market. In 2022, Vietnam exported 32,000 tons of coffee worth US$64 million to Mexico.