At the end of the most recent trading session, the price of Robusta coffee in London for July 2024 delivery increased by 73 USD/ton, at 3,892 USD/ton, and for September 2024 delivery increased by 67 USD/ton, at 3,806 USD/ton.
Arabica coffee prices for July 2024 delivery increased by 2.6 cents/lb to 218.25 cents/lb, and for September 2024 delivery increased by 2.55 cents/lb to 217.35 cents/lb.
Coffee market expert Nguyen Quang Binh analyzed that Robusta was the leading force behind the increase in coffee prices on both exchanges at the end of the week. Coffee will have a 3-day break before returning to trading on Tuesday next week. That is probably why the end of the week session was so exciting.
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| Vietnam's Robusta coffee output in the 2024/25 crop year may reach only 24 million bags, the lowest in 13 years. Photo: VNA |
The US will observe Memorial Day on Monday, May 27, so the New York Arabica coffee market will be closed. The UK will also observe the Spring Bank Holiday on the same day, so the London market will also be closed.
Rainfall in Brazil is causing supply concerns, while Vietnam's upcoming crop output is forecast to fall by up to 20 percent, the expert said.
Rain has now begun to appear more frequently in the Central Highlands of Vietnam, but according to meteorological agencies, the rainfall in May and June is still lower than the average of many years. This will continue to affect the coffee harvest in October.
According to experts, this year, farmers' demand for coffee cultivation has increased after coffee prices increased. However, the increase in coffee prices should not be a reason for expanding acreage. In particular, people need to pay attention to the law banning the import into the European Union (EU) of 7 groups of goods (including coffee) originating from deforestation, which will take effect at the end of 2024.
Specifically, the content of the law states that products originating from areas with deforested or degraded forests after December 31, 2020 will not be exported to this market. Therefore, people need to comply and not plant or cultivate on land of forest origin, to avoid violating the prohibitions of this law.
Domestic coffee prices followed the world trend, with a common increase of 3,500 VND/kg, bringing the transaction price to around 113,000 - 114,500 VND/kg.
According to a survey, today's coffee prices in the Central Highlands region turned down after a series of price increases lasting 7 consecutive days. Specifically, today's coffee prices in Dak Lak decreased by 3,000 VND/kg, reaching 114,000 VND/kg. With the same decrease, today's coffee prices in Lam Dong were 113,000 VND/kg. Today's coffee prices in Gia Lai decreased by 3,200 VND/kg, to 114,000 VND/kg. Today's coffee prices in Dak Nong also decreased by 3,100 VND/kg, reaching 114,500 VND/kg.
The global market returned to an uptrend after a sharp decline in the previous session due to some good inventory information, liquidation pressure and market correction after the strong price increase at the beginning of the week. However, in the long term, the problem of supply shortage and adverse weather in major coffee producing countries has brought prices back to reality.
Despite the downward adjustment, today's decrease is still not too high compared to the total cumulative increase recently.
Coffee trader Volcafe - one of the world's largest coffee trading firms - forecasts a global Robusta deficit of 4.6 million bags in 2024/25, which, while lower than the 9 million bag deficit in 2023/24, would be the fourth consecutive year of a Robusta deficit.
Meanwhile, excessive drought in Brazil and Vietnam continues to worry the market. Positive news has just come from Indonesia, where production is forecast to increase by 14% to around 10 million bags in 2024, while there is also news that Mexico is suffering from heat and drought that is reducing its output.
Vietnam’s 2024/25 Robusta coffee crop could reach just 24 million bags, its lowest in 13 years, as poor rainfall in Vietnam has caused “irreparable damage,” Volcafe said.
Some experts say that the sharp increase in coffee prices during the harvest season is quite surprising. The reason is that the coffee supply will basically continue to be in short supply in the long term due to weather issues. Besides seasonal factors and supply and demand, the strong participation of investment funds is an important factor pushing up prices in the market.
Notably, coffee prices usually decrease during the period from May to August because Brazil and some other countries are in the coffee harvest season, with abundant supply. However, the sudden increase in the market and large trading volume shows that concerns about supply shortages, along with geopolitical and economic uncertainties, are still weighing on the psychology of buyers and speculators. The coffee market is forecast to continue its upward trend in the coming time and Robusta coffee prices will soon return to the $4,000/ton mark.
Source: https://congthuong.vn/san-luong-vu-ca-phe-sap-thu-harvest-cua-viet-nam-du-bao-giam-20-322230.html
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