Concerns over a potential coffee shortage due to the EU Deforestation Regulation (EUDR) will impact future coffee prices and export markets. This regulation, which prohibits the circulation of agricultural products linked to deforestation, will take effect on January 1, 2025. The domestic raw coffee price appears to be stabilizing. In the month leading up to August 18, domestic prices hovered around VND115 million per ton, regardless of fluctuations in futures prices. Why is it stable? Volatile future coffee prices Over the last 10 trading sessions on the London robusta coffee market, a primary reference point for Vietnamese coffee traders, futures prices have been highly volatile, fluctuating daily between US$150 and US$300 per ton. These fluctuations, with swings of several hundred U.S. dollars by the close, have put traders in a difficult position, making them hesitant to buy or sell. The Covid-19 pandemic disrupted global supply chains and had strong impact on the market, but these effects are no longer a primary concern. However, freight costs remain over 200% higher than pre-pandemic levels. To ensure a smooth flow of goods, both importers and exporters have reluctantly accepted these exorbitant shipping costs. The market has adapted to the increased risks, such as […]
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