At the end of the most recent trading session, the price of Robusta coffee in London for July 2024 delivery increased by 57 USD/ton, at 4,177 USD/ton, and for September 2024 delivery increased by 17 USD/ton, at 4,042 USD/ton.
Arabica coffee prices for July 2024 delivery decreased by 1.5 cents/lb, to 229.45 cents/lb, and for September 2024 delivery decreased by 1.5 cents/lb, to 228.3 cents/lb.
Coffee prices on the two exchanges moved in opposite directions. The increase in the USD pushed the price of Arabica coffee down slightly. In the early morning of May 30, 2024, in the US market, the US Dollar Index (DXY) measuring the fluctuations of the greenback against 6 major currencies (EUR, JPY, GBP, CAD, SEK, CHF) increased by 0.50%, reaching 105.12.
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| Coffee export prices increase, Robusta reaches 4,200 USD/ton |
The dollar rose, boosted by rising US bond yields, ahead of key inflation data due later this week.
Robusta has easily surpassed the $3,977 mark and the next target is said to be $4,200. According to experts, if this mark is surpassed, the path to return to the July trading peak of $4,338/ton may no longer be a record.
Robusta coffee prices continue to benefit from concerns that excessive drought in Brazil and Vietnam in recent times will damage coffee trees and limit global production.
Coffee prices have rebounded sharply, with Arabica coffee rising to a one-month high and July Robusta coffee returning to a high above 4,000 after nearly a month of losing this mark.
Market concerns over insufficient rainfall in Vietnam could reduce output in the new crop, while initial reports of a continuing heatwave in Brazil pose risks to coffee growing areas in the 2024/25 season.
On the floor, after 2 weeks of liquidating positions, the main speculators returned to continue buying, causing the market to regain the high price level. Robusta coffee prices continued to heat up when they had a spectacular increase again after nearly a month of free fall from the peak.
Technically, the strong resistance level of Robusta coffee price is 3,967 USD/ton. If this level is overcome with abundant cash flow entering the market, Robusta coffee price can completely move towards the old historical peak of 4,338 USD/ton. Currently, coffee price may move up to the price range of 4,200 USD/ton, before conquering the historical peak again.
Global Robusta coffee prices are also being supported by the latest information from Brazil's Somar Meteorologia, which said that last week's rainfall in Minas Gerais state was only 69% of the historical average for the same period. The dry conditions could affect the outlook for next year's crop. Minas Gerais state is one of Brazil's largest coffee growing regions.
The US Department of Agriculture (USDA) has just released its annual report on the world coffee market for the 2023/2024 crop year, forecasting that global consumption this year will increase by 2.2% to 177 million bags (60 kg/bag).
In early May, coffee prices fell sharply due to profit-taking by hedge funds. According to analysis by experts from the International Coffee Organization (ICO), fundamental market factors such as production shortages, especially for robusta, and high global demand are factors that will continue to support prices in the coming time.
Therefore, the ICO believes that the recent price decline is only short-term after reaching a historical peak in mid-April. However, whether coffee prices will return to their old peak or not depends largely on whether speculative cash flows will return in the context of cash flows focusing on cocoa.
According to a survey by Safras & Mercado Consulting (a company specializing in research on global agribusiness), as of May 8, Brazil had sold about 94% of its Arabica coffee output for the 2023-2024 crop year (in the same period of the 2022-2023 crop year, sales reached only 91% of output); Robusta coffee sales reached 97% of output (in the same period of the previous crop year, it was 94%).
In the short term, the world coffee market is not expected to have strong fluctuations. The buying position of fund management companies and large speculators will be moderate from now until the Brazilian winter. Currently, the weather is quite favorable in the Central Highlands of Vietnam.
At the same time, Robusta coffee prices in the domestic market increased again after falling below VND100,000/kg. However, favorable weather information in the Central Highlands and exchange rate fluctuations restrained the strong recovery of coffee prices.
Source: https://congthuong.vn/gia-ca-phe-xuat-khau-bat-tang-robusta-cham-moc-4200-usdtan-323206.html
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