1. The End of 2015: A Turning Point
Table of Contents
As 2015 drew to a close, global financial markets — including coffee futures — were heavily influenced by the strength of the U.S. dollar (USD).
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Stronger USD: A rising dollar often pushes traders to liquidate long positions and move to selling on futures markets, pressuring coffee prices lower.
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Weaker Euro: Meanwhile, a depreciating euro makes coffee more expensive in Europe, the world’s traditional consumer market, discouraging demand.
Together, these currency shifts created a challenging environment for coffee exporters, including Vietnam.
2. Currency Dynamics and Global Impact
On December 1, 2015, the Chinese yuan (CNY) was added to the International Monetary Fund’s reserve currency basket, officially effective in September 2016. Until then, its potential depreciation could harm raw material exports to China.
Other currencies also posed difficulties:
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The Brazilian real, Colombian peso, and Indonesian rupiah remained volatile, making Vietnamese coffee less competitive.
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This placed Vietnamese coffee under significant pressure heading into 2016.
3. Challenges and Opportunities for Vietnam
For Vietnamese farmers, the only real relief would come if futures prices rose sharply. Yet any strong price rally would likely encourage competing producers — Brazil, Indonesia, India, Colombia — to accelerate exports, limiting the upside.
Thus, even if there were talk of a global coffee shortage, currency fluctuations remained the dominant factor shaping prices.
4. Market Performance in Late 2015
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Brazil’s coffee exports (Nov 2015): ~3.12 million bags, slightly higher than Nov 2014 (2.86m) but down 180,000 bags from Oct 2015.
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New York Arabica futures: Closed at 119.90 cts/lb, up 0.25 cts/lb after a weak session.
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London Robusta futures: Ended at USD 1,521/ton, up USD 14/ton.
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Vietnam’s domestic coffee prices: Fell to their lowest since early 2014, around VND 33.2 – 33.6 million/ton.
5. Outlook for 2016
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Some analysts suggested that the low price levels created a good opportunity to buy and stockpile coffee.
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Others emphasized that weather and production levels in key growing regions would ultimately determine price movements in 2016.
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Overall, expectations leaned toward a potential recovery during 2016–2017, as commodities entered a possible upward cycle.
✅ Conclusion
In 2016, coffee prices were set to be shaped primarily by currency trends (USD, Euro, Real, Yuan) and by weather-related production shifts. For Vietnam, the challenge lay in facing tough competition and unfavorable exchange rates, while opportunities could arise if futures prices staged a strong rally.