World coffee prices increased sharply at the end of the week for Robusta coffee when the net buying volume on the London floor was still too much, the physical price set a 15-year high. Meanwhile, contrary to experts' forecasts that domestic coffee prices would not increase as shockingly as in the previous period, today (July 8), domestic coffee prices suddenly increased shockingly by nearly 2,000 VND/kg in key localities. Currently, 66,800 VND/kg is the highest transaction price in localities, recorded in Dak Nong province.
Speculation that the decline on the London exchange was halted after the ICE inventory report on July 6 decreased by 11,820 tons, a sharp decrease of 11.98% compared to a week earlier, to register at 62,130 tons (about 1,035,500 bags, 60 kg bags), recording a "huge, rare" inventory decrease.
Arabica coffee prices continued to adjust slightly higher, after the release of the June meeting minutes showing that there was consensus among the US Federal Reserve (Fed) executives on the possibility of further monetary tightening at upcoming meetings. In addition, cold weather forecasts that could cause frost in the high mountains of Brazil's Minas Gerais state also contributed to the New York market's recovery, although the risk of frost is not expected to affect Arabica coffee grown in lower areas.
 |
| Domestic coffee prices today, July 8, increased sharply by 1,800 - 1,900 VND/kg in some key purchasing localities. (source: dallas.culturemap) |
At the end of the weekend trading session (July 7), the price of robusta coffee on the ICE Futures Europe London exchange increased sharply. The price of robusta coffee futures for September 2023 delivery increased by 111 USD, trading at 2,621 USD/ton. The price of November delivery increased by 69 USD, trading at 2,475 USD/ton. The average trading volume was high.
The price of Arabica coffee on the ICE Futures US New York exchange for September 2023 delivery continued to adjust slightly, up 0.45 cents, trading at 160.9 cents/lb. Meanwhile, the December 2023 delivery increased 0.4 cents, trading at 160.05 cents/lb. Trading volume increased.
Domestic coffee prices today, July 8, increased sharply by 1,800 - 1,900 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
The latest information from the US economy shows that the Fed will likely continue to raise interest rates later this month. Most markets are predicting that the Fed will raise interest rates by 0.25% at the upcoming meeting, causing the USDX to rebound, prompting Wall Street investors to shift capital flows to high-liquidity commodity exchanges, causing significant fluctuations in the coffee futures markets.
On the robusta trading floor, according to technical analysis, technical indicators are showing signs of continued downward momentum. It is expected that in the short term, robusta coffee prices will fluctuate and accumulate within the range of 2500 - 2550.
Robusta coffee prices need to rise above 2516 to find an opportunity to rise back to 2550. On the contrary, it is necessary to pay attention to the price range of 2495 - 2500, if it falls below this range, robusta coffee can establish a downtrend.
Meanwhile, technical indicators in the arabica market all show signs of continued bearish momentum.
In the short term, it is expected that Arabica coffee prices may fluctuate and accumulate within the range of 156.5 - 164.5. Arabica coffee needs to surpass the MA10 line at 163 and maintain above this level to have a chance to recover. However, if Arabica loses the support price zone near 159 - 159.5, a downtrend may be established.
“Despite the recent surge in global coffee prices, coffee farmers are struggling with inflation, soaring production costs and crop failures due to the effects of climate change,” said Monika Firl, senior director of coffee at Fairtrade International, in a statement.
Fairtrade International’s new minimum price for wet Arabica coffee, which accounts for more than 80% of Fairtrade coffee sold globally, is $1.80/lb, up 40 cents from the current price. Fairtrade International’s minimum price for natural Robusta coffee is increasing by 19 cents to $1.20/lb.
Additionally, the guaranteed premium for coffee sold as Fairtrade and USDA Organic (FTO) is increasing from 30 cents to 40 cents per lb, according to Daily Coffee News.
“ From a model perspective, historically, Fairtade International, Fairtrade USA, we’ve all focused on price and premiums to achieve impact in creating better livelihoods for farmers,” said Rice.
Source
Comment (0)