Low prices, exports still more, why?
Vietnam and many countries have implemented the “social gap” regime, which has slowed down the export of coffee, so trading in the domestic market is very limited. Most of the published prices in the market come from the consignments sent into the warehouse.
“My business still has nearly 2,000 tons of un-sold, now the price is down like this, I don't know what to do?”, The owner of a purchasing agent in Dak Lak worried.
Often goods sold into warehouses are contracts that exporters expect to increase in price to finalize the official price at a high level to benefit. However, in the last period, the price of London robusta derivative coffee, where Vietnamese coffee traders often use as a reference, is getting worse.
“Price is not dare because the purchase price is higher than the sale price, then sold out, then surely nothing can buy with the amount sold, so had to ride the tiger”, the business owner said.
When asked why the sale is not running but the export volume is still large, many people said that the current amount of exported coffee is actually available in the stock of buyers. They (the buyer) have the right to deliver or sell to anyone, and the export sales like us only have to wait for the market to finalize the price.
Depending on the price listed on the floor, if the London pegged at a high level, collecting more money, less then less … and anyone who blocked the hole, no money.
“Even if you are blocked at a low price, you have to pay more to the seller,” explained the sales staff of an export company.
The statistics department of the General Department of Customs said that in the first half of April 2020, Vietnam's coffee exports reached nearly 82.5 thousand tons, worth US $ 136 million. Thus, from the beginning of the year to the end of the reporting period, Vietnam exported nearly 600 thousand tons, worth more than 1 billion dollars.
Crude oil prices pulled down coffee prices?
Last week, the coffee business was really worried that the WTI crude oil contract was negative when on the first notice day (FND) for the period of May 5-2020 on this floor.
The coffee trader has witnessed many selling pressures on coffee prices every time he came to FND, but the negative trading prices like the WTI contracts were only recently seen because this was the first time in the history of the market. derivative school.
The date of the first notice of delivery is interpreted as the adjacent time to liquidate the purchased contracts for the month which is about to become the spot month. If the buyer does not receive the goods, they must pay them off by selling them, no matter how much they lose. That is the case of “headache” of WTI crude oil contract in May 5-2020 last week.
Crude oil prices have a great influence on the common ground of commodity commodity markets in general. Once the price of crude oil drops, it usually involves commodities that have more or less lost. Besides, capital in the financial market is connected, so “one horse hurts, the boat abandons grass” is exactly that.
Experience of WTI oil prices needs to be learned in the current way of trading coffee. It should be understood that the WTI contract traded in May of “free” dropped to a negative level because many crude oil traders on this floor raised prices, which means they have confidence that oil prices will increase, thus accumulating buying contracts. very large amount.
Looking back at the WTI contract price, we see that from early January to early 2020, the price is still $ 60 / barrel. But the Covid-19 pandemic broke out, crude oil consumption fell sharply, prices kept going down. When it came to levels that were equal to those in the early 2000s, many investors (actually called bulls) thought they were “too low” and threw a bet on them.
It is known that the amount of money injected from the beginning of 2020 to before the FND is up to 6.2 billion dollars. Because of the strong belief that WTI oil price will rise, speculators have to pay the price. Within just a few days of April 21, 2020, WTI oil investors lost $ 3 billion due to buying at high prices and having to sell at low prices.
In fact, big investment funds and hedge funds have had information in advance by buying data from artificial intelligence firms (AI), they were abruptly on hand by liquidating them first. and the main players are small investors, companies that have little capital because they cannot access the market database because it is very expensive.
Crude oil prices make coffee prices plummet?
The collapse of WTI crude oil price spread to two coffee floors? No appointment to meet, the two derivative coffee itself last week also in the base FND period 5-2020.
Price of robusta floor term in May 2020 sometimes reached US $ 1,073 / ton, the deepest level since June 2006 to close April 24, 2020 at US $ 1,098 / ton. Meanwhile, after a week, the price of arabica lost 10.80 cts / lb equivalent to -238 dollars / ton.
Thus, the price of derivative coffee decreased last week also “consumption” as crude oil WTI. Two coffee floors met FND, under pressure to sell, buy at high prices and have to sell when prices are low, but not comparable with WTI.
To avoid this situation from happening again, information is important. Is it always speculative prices up, or in the case of WTI and London robusta coffee recently, should the sugar reduce or “speculation prices fall”? Sometimes market information is too “pink”, drawing positive lines, which will lead to misleading judgments for domestic growers and agribusinesses, which have little access to market information. widespread.
It is best to gather for yourself and the business information that is accurate and accurate, evaluate the reliability of the information, and act as a “consultation” of doctors for a case. Because when speculation prices go up, when speculation prices down, just one misperception is to dissipate the career.
The reason for many commodity trading enterprises still exists for hundreds of years because they are very disciplined and minimize speculative prices as mentioned. Only company leaders have the right to bet prices up or down with about 5% to a maximum of 10% when the trend is clear, and mainly just buy somewhere to sell.
Because after all, trading on the derivative floor, the price does not know what is high, what is low. Sometimes the idea of low price, buying in is still loss, thought of selling high but losing. Why? Derivative exchanges are becoming a place of financial trading in the form of speculation. People with little money cannot buy information, but wealthy investment funds can know from market sentiment, trading position to wait until favorable … is “good luck”.
According to the Saigon Economic Times
