The main items in this weekend’s coffee story include:
- Robusta coffee at the weekend hit its lowest level in 2 and a half months.
- Brazil has had rain recently, coffee flowers bloomed well in October 2024
- Robusta Coffee exports from Sumatra, Indonesia increased in September 2024
- Vietnam’s coffee export value increased sharply compared to the previous crop.
Robusta coffee futures fell to a 2-1/2-month low in Friday’s trading session, with the harvest in Vietnam expected to accelerate this November.
At the end of the session, the price dropped more than 2% to $4,279 per ton, after reaching a 2 and a half month low of $4,259 based on January 2025 prices.
Traders say strong conilon (robusta) coffee exports from Brazil this season have also contributed to pressure on prices.
Meanwhile, Arabica coffee prices ended the session down 1.2% to 242.95 cents/pound, with news mainly due to the extent to which recent rains will help Brazil’s coffee crop recover after a period of recovery. prolonged dry period.
According to cooperatives and agronomists, coffee growing areas in Brazil flowered quite a lot in October after the rains returned. Calculated in the past 4 weeks, Coffee has decreased by 5.06%
Meteorologist Climatempo said heavy rain is expected in the Minas Gerais region of Brazil starting this Saturday.
Another factor that has caused coffee prices to drop sharply is that the Brazilian currency has weakened when the Real has dropped to its lowest level in nearly 3 months compared to the dollar at 5,780 Brazilian Real to 1 USD.
Indonesian government trade data from Sumatra, Indonesia’s top coffee-producing island, reported its Robusta exports in September at 159,918 bags or 76.36% higher year-on-year . This contributed to the island’s total robusta coffee exports in the first six months of 2024 being 14.28% higher than the same period last year, with a total of 1,268,499 bags.
The amount of certified graded Arabica coffee stored on the New York exchange increased by 2,505 bags last Thursday, reaching 852,058 bags.
The current month’s futures contract price difference between the New York and London markets widened further on Thursday, standing at 47.73 Usc/Lb. This reflects that Robusta prices are gradually decreasing in value compared to Arabica during the previous period of price tension.
The latest data released shows that the US personal consumption expenditures (PCE) price index increased 0.2% in September, increasing expectations for a second interest rate cut by the FED next year. This month, if the FED actually reduces prices as people are predicting and expecting, the USD will depreciate compared to other currencies in the currency basket and help coffee prices gain momentum. than.
According to news from Vietnam — A sharp increase in export prices is the main reason why the export revenue of the Vietnamese coffee industry has increased dramatically so far, according to the Vietnam Coffee and Cocoa Association (Vicofa).
The association reported that in the 2023-24 crop year from October 2023 to September 2024, Vietnam exported 1.46 million tons of coffee, worth US$5.43 billion, a decrease of 12.1% in volume but increased by 33% in value compared to the previous crop year.
In the first nine months of this year, the average coffee price increased 56% over the same period last year to $3,896 per ton. Nearly 50% higher than the previous crop year, the highest increase among Vietnam’s main export agricultural products.
In the 2024-25 crop year, Vietnamese coffee prices are expected to continue to remain high due to high demand in domestic and international markets.
Our technical commentary for next week:
– As for Arabica coffee prices in December 2014, it is very likely that prices will continue to decline and may reach the technical low of 235.30 cents/pound, which is a level that will find some buying demand on Technical analysis basis.
– For Robusta coffee based on January 2025 prices, it is forecast to continue to decrease further next week with a possible target of $3,946/ton. At this support level, the Robusta market can find buying and it cannot be ruled out that the price will rebound from here. However, if this milestone fails, Robusta price may go down to $3,800/ton.
Technical information is only valuable as an additional information channel for reference, you should consider carefully when using it for your business.
Kinh Vu (giacaphe.com)
