July Arabica coffee traded on Thursday closed up 2.2 cents/pound and July Robusta coffee closed up $33/ton at $4,304/ton.
Although the price increase in Thursday’s trading session was not as strong as previous sessions, Robusta coffee prices in July also reached a new high in the contract, hovering above 44,300/ton, a very high mark ever. see. The main cause of this price increase is still believed to be the very tight supply from Vietnam at this time.
The winter months are approaching in the Southern Hemisphere, traditionally the focus of market speculation will shift to the largest producer and exporter, Brazil, which is currently forecasting cool weather. cooler, less rain coming to large coffee growing areas.
This country accounts for an average of 40-50% of global coffee production. The world depends heavily on the volume of high quality coffee from Brazil every year, to meet domestic coffee demand as well as for export. Therefore, weather forecasts will be closely watched by both speculators as well as other participants in the coffee industry whenever the winter months arrive from mid-June through August. Cold air will be the subject of potential additional volatility to the coffee market in the short and medium term.
Inventories of certified graded Arabica coffee held on the New York market are said to have increased by 5,142 bags yesterday, reaching an inventory level of 652,672 bags.
The focus of the European coffee consumer market, currently fluctuating due to the supply/demand imbalance from Vietnam after Robusta coffee output was lower than average in the country’s coffee crop from October 2022 to September 2023 reaches 26.50 million bags.
Forecasts for the current coffee year are only at an average estimate, Vietnam’s Robusta coffee output from October 2023 to September 2024 will reach a total of about 28.50 million bags, with high than the previous season,
This larger crop is helping to boost exports to consumer markets although it is noted that the potential for carryover stocks into the next 2024/2025 crop will further limit and therefore the development of the crop. Vietnam’s upcoming Robusta coffee is a factor being watched very closely by all market participants. Any cause that causes additional disadvantages to Vietnam’s crop output at this time will be very sensitive, quickly pushing prices up beyond the current high level.
With the coffee price on the trading floor always increasing higher the next night than the previous night, the domestic price today has exceeded all the expectations that Farmers expected, some people still hold coffee in their hands at this time. Even setting a price of 150,000 VND/kg before thinking about releasing warehouses for the new crop.
Kinh Vu (giacaphe.com)
