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What impact does the continued low coffee price have on the packaging industry



After coffee prices rose sharply in April due to drought and high temperatures in Vietnam, the prices of Arabica and Robusta coffee saw major adjustments last week. The prices of Arabica coffee fell by more than 10% on a weekly basis, while Robusta coffee prices fell by more than 10%. Futures prices fell more than 15% on the week, mainly due to the return of rainfall in Vietnam's coffee-producing areas.

Arabica coffee futures price trends in the past week:






Robusta coffee futures price trends in the past week:




According to data from the local meteorological department, it has rained almost all over Vietnam since the end of April. Rainfall was as high as 130 mm near Hanoi in the north, and rainfall in southern provinces, including the central plateau, ranged from 20 mm to 40 mm. Late rainfall helped Vietnamese coffee bloom smoothly, easing market concerns and causing coffee prices to fall.




However, it is worth noting that there are still "hidden dangers" in Vietnam's weather:

1. Rainfall remains irregular, and due to the missed flowering period in April, coffee production potential cannot be fully restored.

2. Despite the rain, the maximum temperature remained high, with the temperature across the country remaining around 35 degrees Celsius.

Vietnam's cumulative rainfall performance in the past week:

In addition to the return of rainfall in Vietnam's coffee-producing areas, the increase in coffee stocks on exchanges and the increase in global coffee exports also contributed to the price decline.

As of May 3, the number of certified coffee stocks on the U.S. ICE Exchange has increased for 12 consecutive weeks. The number of Arabica coffee stocks has risen to a nearly one-year high, and the number of Robusta coffee stocks has also risen to a nearly five-month high.

In addition, data from the International Coffee Organization showed that a total of 12.99 million bags of coffee were exported globally in March, an increase of 8.1% compared to the same period last year.

After international futures prices turned around, Brazil's domestic coffee spot prices fell simultaneously. At the same time, the real price fell from 5.25 to 5.10 against the US dollar, exacerbating the decline in coffee spot prices.

In the southern region of Minas Gerais, Brazil's largest coffee-producing region, the average spot price of Arabica Good Cup coffee in April was 1,212 reais/bag, and reached 1,340 reais/bag at the end of April. peak. But in early May, the price dropped rapidly to 1,170 reais/bag.


It is worth noting that although the spot price of Brazilian coffee fell in early May, it was still higher than the same period last year and the average price of the past five years, which was about 894 reais/bag.

The market expects that as the new season coffee harvest approaches, the spot price of Brazilian coffee will face further negative pressure, as can be seen from the far-month contract price - the latest spot price of first-season coffee delivered in September is 1,130 reais Er/bag, which is lower than the current market spot price.

In other Brazilian producing areas, spot coffee prices are lower. The latest coffee spot price in Rio de Janeiro is between 1,050-1,060 reais/bag.

It is worth noting that as prices in coffee-producing areas continue to fall, how to increase the brand's market share becomes particularly important. Among them, packaging is the most direct way of promotion. Research shows that most consumers are willing to pay for beautiful and unique packaging. At this point, you need to find a packaging supplier who can communicate and cooperate smoothly.

We are a manufacturer specializing in producing the coffee packaging bags for over 20 years. We have become one of the largest coffee bag manufacturers in China.  

We use the best quality WIPF valves from Swiss to keep your coffee fresh.

We have developed the eco-friendly bags, such as the compostable bags and recyclable bags.  They are the best options of replacing the conventional plastic bags.

Attached our catalogue, please send us the bag type, material, size and quantity you need. So we can quote you.

Post time: May-10-2024