World coffee prices continued to fall for the third consecutive session, with robusta falling sharply, amid a continued high US dollar.
Coffee prices on both exchanges continued to decline due to the strong liquidation of net positions by funds and speculators, following concerns about risks from the tough stance at the conference of central bank presidents of countries, in strongly raising monetary interest rates if global inflation does not ease.
The US dollar rose to a two-week high in the last trading session, after economic data showed the labor market remained tight, creating an opportunity for the US Federal Reserve (Fed) to continue raising interest rates. Investors strongly shifted capital flows away from derivatives exchanges to find safe havens. The decline of robusta was also due to the large number of short contracts on this exchange. Previously, speculators chose robusta coffee as a shelter for cash flow.
Arabica continued to decline due to pressure from Brazil's new crop this year with forecasts of a record harvest.
In the domestic market, coffee prices continued to decrease by 800 - 900 VND/kg, accordingly, the highest transaction price in localities was 64,700 VND/kg, recorded in Dak Nong province.
 |
| Domestic coffee prices today, July 1, continued to drop sharply by 800 - 900 VND/kg in some key purchasing localities. (Source: ohman.vn) |
At the end of the last trading session of June, the price of robusta coffee on the ICE Futures Europe London continued to fall sharply. The price of robusta coffee futures for September 2023 delivery decreased by 79 USD, trading at 2,491 USD/ton. The price of November delivery decreased by 83 USD, trading at 2,391 USD/ton. Average trading volume.
The New York Arabica Coffee Futures Exchange continued to decline, with the price of Arabica coffee on the ICE Futures US New York for September 2023 delivery down 2.6 cents, trading at 159.00 cents/lb. Meanwhile, the December 2023 delivery fell 2.15 cents, to 158.10 cents/lb. Trading volume was high on average.
Domestic coffee prices today, July 1, continued to drop sharply by 800 - 900 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
The EUDR officially comes into effect in December 2024; for small and medium-sized enterprises this deadline is extended to June 2025.
The EUDR poses significant challenges for the Vietnamese coffee industry, especially in terms of complying with sustainability standards and maintaining access to the EU market. Under this Regulation, 100% of certain Vietnamese agricultural products, especially coffee, when imported into the European market must have GPS information.
The time for Vietnam to prepare is also very urgent, only within 18 - 24 months. Meanwhile, at the recent Conference "Production and supply of coffee without causing deforestation according to European Union regulations", experts assessed that Vietnam's coffee growing areas are fragmented and small, so compliance will require a lot of time and effort. Accordingly, the whole country currently has more than 1 million coffee growing households, of which 70% of participating households have an area of less than 0.5 hectares. Therefore, the cost of compliance is very expensive.
Compliance costs are considered quite high and much higher than previously implemented programs, while the profit margin of the coffee industry is very thin. Vietnam only has 18-24 months to prepare, so the pressure is very high.
However, according to Ms. Tran Quynh Chi, Director of the Asian Landscape Region, IDH Organization, the birth of the EUDR regulation will be an important push to create a fundamental shift for the entire industry towards transparency and sustainability, meeting the diverse requirements of the market and buyers such as no deforestation, low emissions and household livelihoods.
Source
Comment (0)