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Coffee prices are near record levels thanks to Asia's growing middle class

Thanks to rising demand from the growing middle class in China and some Asian countries, coffee futures prices on the world market are approaching record levels.


Coffee futures prices on the world market are approaching record levels or recent highs thanks to increased demand from the growing middle class in China and some Asian countries.


Meanwhile, some major producers seem to be facing harvests that are not as high as expected.


Robusta coffee futures price in the London market reached 3,497 USD/ton on March 7, the highest level of all time. The price of this commodity remains high, closing at 3,421 USD/ton in the session on March 19.


Arabica coffee futures prices in the New York market also reached their highest price in 14 months in December 2023. This item was offered for sale at 181.85 cents/pound (1 pound = 0.45kg), an increase of 24% compared to the level at the end of September 2023 on March 18.


In a December 2023 report, the US Department of Agriculture (USDA) said coffee output in Indonesia, the world's third-largest producer, is expected to decrease by 20%.


In addition to adverse weather such as high temperatures and drought in Southeast Asia caused by the El Nino phenomenon, some farmers are switching to growing crops with more stable yields, including rubber and rubber. durian.


Director of the beverage department at trading company Marubeni, Mr. Taisuke Horie, said some retailers are replacing Arabica coffee with Robusta coffee to avoid skyrocketing retail prices. Growing demand is tightening Robusta's supply, leading to higher prices.


Global coffee bean consumption in 2023-2024 will increase by 20% compared to 2013-2014, with notable growth in Asia.


USDA reports that consumption in major producing countries like Indonesia increased by 90% during the same period. China, the world's seventh largest coffee consumer, is recording a 130% increase.


The Brazilian Coffee Exporters Council reported that coffee exports from Brazil, the largest producer of Arabica coffee beans, to China in January and February 2024 increased by 160% over the same period last year. This increase exceeded exports to larger coffee-consuming countries such as Japan, where exports increased by 87%, and the United States increased by 37%.


In 2023, coffee exports from Brazil to China will reach 1.4 million 60kg bags, an increase of 278.6% compared to the previous year making this Asian country the 6th largest coffee importer of the world. Brazil is up 14 places compared to 2022.


In January 2024, coffee sales to China also increased in volume, at 153.9% compared to the same period in 2023.


According to experts, one of the keys to this success is that the trade relationship between Brazil and China is increasingly being strengthened, especially since China has become Brazil's largest trading partner since then. since 2009.


Although export businesses face logistical challenges due to the geographical distance between Brazil and China, which is quite far compared to other competitors, the Brazilian coffee industry has the advantage of good trade relationships. between two countries.


In addition, coffee exports to China in 2023 will skyrocket thanks to the country's young population adopting new consumption habits, including enjoying new and high-quality coffees.


Meanwhile, as the world's largest coffee producer and exporter, Brazil possesses a diversity of coffee varieties and types, including Arabica and Robusta coffees, thereby "bringing giving consumers different exciting experiences.”


Another key to the success of Brazilian coffee exporters in the Chinese market is ensuring compliance with signed contracts, both in terms of product quality and delivery time.


Mr. Horie said in Asia, coffee is largely a luxury product for the wealthy, but with population growth and economic development, the middle class has expanded and the number of people who enjoy Daily coffee also increased.


British research company World Coffee Portal reported that as of December 2023, China has surpassed the US to become the country with the most coffee shops in the world. Coffee shop chains originating from China are also expanding rapidly worldwide. Cotti Coffee, founded in 2022, has more than 7,000 stores globally and expanded to Japan in 2023.


Rising coffee futures prices are also impacting consumer prices in Japan. Ajinomoto AGF will increase the price of some instant coffee products from 20% to 25% starting from April 1.


(TTXVN/Vietnam+)


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