The slight rebound of Reais copper supported coffee growers to reduce sales, while the forecast for Brazil’s production in this year’s crop would decline due to drought and in the year of a two-year cycle decline began to become a major concern. of the market at the moment.
Robusta London Tue / 2021 week 2 chart (from 11/01/2021 – 16/01/2021)
For the whole week 2, London market had 3 losing sessions and 2 gaining sessions. Robusta coffee futures for delivery in March increased by $ 35, or up 2.66%, to $ 1,353 / ton and for May futures increased by $ 34, or up 2.56%, to $ 1,363. / ton, relatively strong increases. Trading volume is above average.
Similarly, New York market had 3 gaining sessions and 2 decreasing sessions. Arabica coffee futures for immediate delivery in March increased all 4.45 cents, or 3.60%, to 128.15 cents / lb and futures for May delivery increased all 4.5 cents, ie increased by 3, 58%, to 130.25 cents / lb, strong gains. Trading volume quite high above average.
The price of coffee beans in the Central Highlands market increased from 600 to 700 VND, up to fluctuating in the frame of 32,000 – 32,500 VND / kg.
Two-floor coffee prices reversed and increased again when the Brazilian supply started to be interested in the market. According to many assessments of both international and domestic traders, drought at the beginning of the new crop has damaged the first batch of cotton, output in key Arabica producing regions can drop by 20-30%. up to 50% in some places. Meanwhile, this is the Arabica coffee crop in Brazil with low cyclic output “Two years one” so the possibility that the supply shortage will be a special concern of the consumer market right from the beginning of the new year.
However, a review of many surveys shows that the main Robusta coffee growing areas this year have increased yields, about 10-15% or more as a result of the investment in the care and improvement of new varieties. For the past year in a row, including a study tour to learn about farming methods from the world’s leading Robusta producer to increase productivity as well as expand cultivated areas. Brazil has also made no secret of its goal of not only being the world’s largest producer of Arabica, but also of Robusta.
According to international weather forecasts, the current La Nina weather phenomenon in the Pacific may last until March, so it is still a concern for coffee growing countries around this belt. La Nina does not cause much rain, wet air, creating opportunities for fungi to grow, but also causing drought in the coffee area in southeastern Brazil and in West Africa, which is influenced by the Atlantic belt climate.
According to weather forecast, drought will return next week in the state of Minas Gerais, Brazil’s largest Arabica coffee growing state. While the Lunar New Year holiday in Tan Suu year in Vietnam is just over 3 weeks away. It is expected that coffee farmers will boost sales to get cash to spend on this important traditional holiday. Perhaps these will help the markets maintain their differentiated short term trends.
Strong / weak Reais copper will impact on coffee prices at this time, while Brazil faces crops with reduced yields. While the dollar strengthened again, it made it difficult for emerging currencies to pay for goods at more expensive prices.
Inventory of Robusta coffee is certified and tracked by London floor, as of Monday 11/01, it has increased by 2,470 tons, or 2.01% compared to the previous trading week, to register at 141,970 tons (equivalent to 2,366,167 bags, bags of 60 kg).
English (giacaphe.com)
