The pressure of the currency exchange rate against the USD did not support coffee prices on both futures exchanges in the short and medium term.
London March 2022, week 5 (January 24, 2022 – January 29, 2022)
For the whole week 4, the London market had 2 increasing sessions and 3 decreasing sessions. The price of Robusta coffee for March delivery fell all of 20 USD, or 0.90 %, to 2,193 USD/ton, while the futures for May delivery increased by all 5 USD, or 0.23%, to $2,184/ton, slight increases/decreases. Trading volume above average.
On the contrary, the New York market had 3 increasing sessions and 2 decreasing sessions. The price of Arabica coffee for March delivery fell all of 2 cents, or 0.84%, to 235.90 cents/lb, and for May delivery fell all of 1.65 cents, or 0.69%. , to 236.45 cents/lb, significant reductions. Trading volume pretty high above normal.
The price of green coffee beans in the Central Highlands market decreased from 0 to 100 VND, to range from 39,400 to 39,900 VND/kg.
Arabica coffee prices weaken again as the International Coffee Organization’s December Trade report lifts the global surplus from 1.97 million bags to 2.41 million bags in coffee year 2020/2021 after cutting reduced its global consumption forecast by 423,000 bags to 167.3 million bags. However, Rabobank has just issued a warning that the inventory certified by ICE – New York will drop below 1 million bags. “in the next few months”. This also often happens when Brazil is about to enter a new coffee crop, farmers have traditionally focused on harvesting rather than selling coffee.
Meanwhile, the Reais rose to a 6-month high, but the UDDSX also strengthened, making greenback-denominated commodities more expensive, also creating resistance for speculators to buy.
On the contrary, the London market has a very significant support when the world’s largest Robusta producer is closed for a long Lunar New Year holiday, while Vietnam has forecast that coffee exports for the whole year 2021 will decrease by 0.2. % compared to the previous year, although coffee exports in December increased sharply over the same period. Not only does the holiday before and after Tet last for nearly two weeks, but February is also a month with few days, so Vietnam’s exports will drop is easy to see.
Citigroup has just released a forecast that Vietnam’s Robusta coffee output in the 2022/2023 crop will increase by 5.1 percent to 33 million bags, as a significant improvement in London futures prices will encourage farmers to actively cultivate. New crop helps increase coffee production.
English (giacaphe.com)
