World coffee prices have been constantly reversing in the last sessions of the week. Overall, the price of robusta coffee on the London floor has decreased 4 sessions and increased 1 session in the middle of the week, the decreases are very strong. Robusta coffee futures for September delivery decreased by 128 USD to 2,544 USD/ton and futures for November delivery decreased by 154 USD to 2,363 USD/ton. Trading volume is very high above average.
Meanwhile, the price of Arabica coffee traded on the New York market also had 1 increase and 4 consecutive decreases at the beginning of the week, the decreases were also very strong. The price of Arabica coffee futures for September delivery decreased by 10.35 cents to 147.45 cents/lb and the price of December delivery decreased by 7.70 cents to 150.00 cents/lb. Trading volume remained very high above average.
Robusta coffee inventories certified and monitored by the London exchange, as of August 18, decreased by another 10,700 tons, or 21.69% compared to a week earlier, to a registered level of 38,640 tons (about 644,000 bags, 60 kg bags), with no recorded additions.
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| Domestic coffee prices fell by 400 - 500 VND/kg in key purchasing localities in the trading session ending last week (August 19). (Source: doanhnhan.biz) |
At the end of the trading session last weekend (August 18) on the international futures exchange, coffee prices continued to fluctuate on both exchanges. Robusta coffee prices on the ICE Futures Europe London exchange for September 2023 delivery decreased by 31 USD, trading at 2,544 USD/ton. November delivery decreased by 28 USD, trading at 2,363 USD/ton. Average trading volume.
Arabica coffee prices on the ICE Futures US New York exchange for September 2023 delivery turned up slightly by 0.45 cents, trading at 147.45 cents/lb. Meanwhile, the December 2023 delivery period increased by 0.9 cents, trading at 150.0 cents/lb. Trading volume increased sharply in the December delivery period.
Domestic coffee prices decreased by 400 - 500 VND/kg in key purchasing localities in the trading session ending last week (August 19).
Unit: VND/kg. (Source: Giacaphe.com) |
The highlight of the past week was the sharp increase in the USDX index in the currency basket, making goods more expensive and reducing the purchasing power of goods in general, including coffee. Coffee funds and speculators have aggressively liquidated their capital and transferred it to other derivative markets such as crude oil and gold, due to more attractive profit margins.
While the market lacks buying power, the selling pressure of the new crop of coffee currently in the final stages of harvest in Brazil combined with the expiration of September futures options on both exchanges forced funds and speculators to aggressively liquidate and balance positions due to previous "overbought" conditions.
The increase in coffee prices is expected to slow down in the near future even though there is no more supply. Because the current coffee price is high and reflects the shortage of goods in the past.
USDA estimates Vietnam’s coffee output in the 2022-23 crop year will fall 6% from the previous year to 29.7 million 60-kg bags. The world’s largest robusta producer will have its lowest harvest in four years due to higher production costs (labor, fertilizer) and farmers’ tendency to switch to more profitable crops such as avocado, durian and passion fruit.
In the first 9 months of the current crop year 2022-2023, our country's coffee exports reached a total of 1.44 million tons (about more than 24 million bags), with a turnover of 3.38 billion USD, up 2% in volume and 6.6% in turnover over the same period last crop year.
In the second quarter, coffee prices continuously set records, at times rising to VND70,000/kg. As of June 30, coffee prices began to cool down to VND65,200/kg, up 35% compared to the beginning of the quarter. Compared to the beginning of the year, this price increased sharply by 68%. This increase continued until July, reaching nearly VND67,000/kg.
We believe that the export volume from now until the end of the year may decrease by about 50% compared to the same period due to the gradual depletion of inventories, mainly in FDI exporters. We believe that the increase in coffee prices will slow down in the coming time even though there is no more goods. As mentioned, the price is currently at a high level and has fully reflected the shortage of goods in the past time.
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