World coffee prices were boosted last weekend by a slight drop in the USDX index and a sharp drop in London inventories.
Overall, the price of robusta coffee increased 2 sessions and decreased 3 sessions in the middle of the week, all of which increased sharply. The price of robusta coffee futures for September delivery increased by a total of 130 USD, or 5.22%, to 2,621 USD/ton. Trading volume remained quite high above average .
Arabica coffee prices last week had 3 sessions of increase and 1 session of decrease, all increases were slight. The price of Arabica coffee futures for September delivery increased by 1.90 cents, or 1.19%, to 160.90 cents/lb. Trading volume was quite high above average.
As of Friday, July 7, ICE-London certified and monitored robusta coffee inventories had decreased by 14,070 tons, or 19.03%, compared to a week earlier, to a registered level of 59,880 tons (equivalent to 998,000 bags, 60 kg bags), which was used by speculators to push coffee futures prices back to near the 15-year high set late last month.
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| Domestic coffee prices increased sharply by 1,800 - 1,900 VND/kg in some key purchasing localities in the last session of last week (July 8). (Source: doanhnhan.biz) |
At the end of the trading session last weekend (July 7), the price of robusta coffee on the ICE Futures Europe London exchange increased sharply. The price of robusta coffee futures for delivery in September 2023 increased by 111 USD, trading at 2,621 USD/ton. The price of futures for delivery in November 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 increased sharply by 1,800 - 1,900 VND/kg in some key purchasing localities in the last session of last week (July 8).
Unit: VND/kg. (Source: Giacaphe.com) |
Robusta coffee inventories managed by ICE have returned to a low of less than 1 million bags, the lowest level since mid-February 2023, amid increasing demand for Arabica coffee replacement, causing the market to return to concerns about coffee shortages in the short and medium term as supplies from major producing countries such as Brazil, Vietnam, and Indonesia show signs of depletion, which has been exploited by speculators to push London prices up at the end of the week. Meanwhile, the pressure of selling the new crop currently being harvested in Brazil on the coffee derivatives markets is also not small.
According to Cooxupé, the largest coffee cooperative in Brazil and the world. As of the end of June, its members had only harvested 34.6% of the cooperative's output, thanks to favorable weather, the harvest progress was somewhat faster than in previous years.
Robusta coffee prices rose 7.8% to 132.1 US cents/lb in June, the highest level since February 1995. In contrast, Colombian Arabica and Other Arabica prices fell 6.6% and 5.8%, respectively, to average 211.9 and 207.4 US cents/lb. Brazilian Arabica prices also fell 5.5% to 176.5 US cents/lb.
On the New York futures market, arabica fell 4.7% to 174.5 US cents/lb, while robusta on the London exchange rose 5.9% to 119.2 US cents/lb. The price gap between arabica and robusta coffee continued to narrow to 50.3 US cents/lb, down 22.6% from the previous month and the lowest level since November 2020.
Certified coffee stocks on the New York and London exchanges fell 8.5% and 9.7% in June, to 0.60 and 1.25 million bags (60 kg), respectively.
Commenting on market developments, the ICO said the decline in arabica coffee prices was due to additional supplies from the ongoing harvest in Brazil, the world's largest arabica coffee producer, and recent reports that favorable weather conditions are supporting the current harvest.
Meanwhile, robusta coffee is benefiting from the trend of shifting demand from high-quality and expensive arabica coffee to cheaper coffees in the context of a global economic downturn and rising consumer living costs.
ICO forecasts global coffee supply in the 2022-2023 crop year at around 171.3 million bags while consumption is at 178.5 million bags, with this forecast the world coffee market could have a deficit of 7.3 million bags in the current crop year.
In 2022-23, global Arabica coffee production is expected to increase by 4.6% to 98.6 million bags. Robusta production is expected to decrease by 2.1% to 72.7 million bags.
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