High coffee prices from social distancing

Social distancing around Vietnam has limited the supply of coffee in the international market, resulting in prices remaining “relatively high” into 2022.

Recently, CNBC news agency cited a forecast of Fitch Solutions about the world coffee price situation and mentioned Vietnam with the advantage of being the second largest coffee exporter in the world. According to customs data, in August, Vietnam's coffee exports decreased by 8.7% compared to July, to 111,697 tons. In the first 8 months of the year, Vietnam exported 1.1 million tons of coffee, down 6.4% over the same period last year, but the turnover increased 2%, reaching about 2 billion USD.

Falling coffee exports from Vietnam and falling output in other leading coffee producing countries have pushed up world coffee prices sharply. Prices for arabica coffee futures are up about 45.8% this year, while robusta prices are up 52.2%, according to data from Refinitiv.

Brazil, the world's largest coffee exporter, has experienced extreme weather events that have damaged coffee farms. Bad weather also reduces coffee production in Colombia. “Additionally, we expect that, at least in the US and Europe, demand will increase in the coming months as the lifting of anti-Covid restrictions allows coffee shops to reopen,” the report said. of Fitch Solutions commented.

The consulting firm raised its forecast for the average price of arabica coffee in 2021 from $1.35/pound to $1.60/lb. The forecast for the average price of arabica coffee in 2022 is raised from 1.25 USD/pound to 1.5 USD/pound.

Fitch Solutions believes that anti-Covid restrictions in Vietnam will be eased gradually, so the interruption of Vietnam's coffee exports may only be a temporary issue. Besides, Brazil's coffee production is likely to recover "quite quickly" as long as extreme weather does not return. This means that the global supply of coffee could start to increase again in the 2022-2023 crop year, with the average price of arabica coffee in 2023 possibly falling to 1.2 USD/pound – Fitch Solutions forecasts . “The ongoing government support measures will help improve coffee production in many of the key coffee producing countries in Latin America and Asia, including Colombia and Vietnam,” the report reads. “Additionally, growth in demand for coffee is likely to peak in many of the largest coffee consuming countries, such as Europe and Japan.”

Rate this item
(0 votes)
Read 759 times
Administrator

Thank you to visit our website, for all the question please contact the administrator - General economic department.

Email: info@mascopex.com

Default Theme
Layout Direction
Body
Background Color [r]
Text color [r]
Top
Top Background Image
Background Color [r]
Text color [r]
Bottom
Bottom Background Image
Background Color [r]
Text color [r]