The price of coffee on both exchanges dropped sharply during the week because funds and speculators fled when USDX increased sharply, causing emerging currencies to lose value in the face of worries about the global economic recession and rapid inflation…
Robusta London chart September 2022, week 28 (from 11/07/2022 – 16/07/2022)
For the whole week of 28, the London market had 4 decreasing sessions and 1 increasing session in the middle of the week. The price of Robusta coffee for September delivery fell by all 58 USD, or 2.93%, to 1,923 USD/ton and for November delivery also fell by all 58 USD, or 2.93%, to 1,924 USD/ton, the reductions are quite strong. Trading volume below average.
In contrast, the New York market had 3 decreasing sessions and 2 increasing sessions. The price of Arabica coffee for September delivery fell all of 20.65 cents, or 9.37 percent, to 119.80 cents/lb and December delivery fell all of 21 cents, or 9.65 percent. , to 196.60 cents/lb, very sharp drops in Trading Volume quite above average.
The price of green coffee beans in the Central Highlands market decreased from 1,000 to 1,100 dong, to range from 38,300 to 38,900 dong/kg.
The somewhat optimistic US economic indicators mixed with the highest inflation level in 40 years have led the market to speculate Federal Reserve (Fed – USA) will be more aggressive in tightening monetary policy and raising the basic USD interest rate higher than the previous expected level of 0.75%. The global market was worried about economic recession, excessive inflation caused investors to move capital flows to seek shelter, causing USDX to have just had a dramatic increase week with a performance of up to 2.6% against the Brazilian Reais and parity with the Euro for the first time.
There seems to have been general market panic due to growing global recession and inflation fears, with the resurgence of covid-19 in China and the war in Eastern Europe getting more intense.
Funds and speculators are fleeing risky investments and with the strong USD rally against the Reais, coffee futures on both exchanges seem to be melting with a drop of approximately 9, 65% in the past week.
In fact, the real Arabica coffee market in Brazil is not active for a whole week. The sharp drop in prices in New York brought commerce to a halt. Some businesses have closed. No sellers appear in the price bases provided.
According to Cecafé, in the coffee year 2021/2022 (from July 2021 to June 2022), Brazil exported 39,589 million bags of 60 kg of coffee of all kinds and achieved record foreign exchange earnings of 8.17 billion USD. , with deliveries to 121 countries. Compared to the previous coffee year 2020/2021, exports decreased by 13.3% in volume but increased by 38.7% in value.
As of Monday, July 11, inventories of Robusta coffee certified and tracked by the London floor increased by 214 tons, or 0.2% higher than a week earlier, to record inventories at 106,900 tons (equivalent to 1,781,667 bags, 60 kg bags).
English (giacaphe.com)
