May Arabica coffee traded on Monday closed up 6.90/pound and Robusta coffee closed up 74$/ton at $3,974/ton.
Coffee prices traded on the first day of the week extended this month’s upward momentum, with Robusta coffee reaching a new all-time high, surpassing a 30-year record of $4,000/ton.
Concerns about coffee crops in Brazil and Vietnam are boosting coffee futures purchases by funds. The Somar Meteorologia meteorological agency reported on Monday that the Brazilian state of Minas Gerais received 15.8 mm of rain over the past week, equivalent to 74% of the historical average.
There was only one bearish factor for coffee as the weakening of the Brazilian Real to a 6-1/2-month low against the dollar on Monday supported selling from Brazilian Farmers, but only somewhat cool down the burning atmosphere on both floors.
The latest COT report on the positions of the New York coffee market’s constituents shows that the non-commercial speculative sector increased their net long position by 12.75%, which stood at 48,550 lots as of Thursday. Tuesday, April 9, 2024.
This same type of position report on the Robusta market shows that the Fund Management component reduced their net long position by 10.63% now registering a new net long position of 39,210 lots.
Inventories of certified graded Arabica coffee held in the New York market are said to have increased by 2,245 bags on Friday, reaching 639,650 bags.
Thus, during the trading day, a 30-year historical price milestone was created. The main indicators in the market such as Arabica and Robusta inventories as well as buying and selling positions did not change much compared to a week ago. , except that the buying position of the Fund Management Companies has changed by reducing the buying position slightly.
It can be seen that the reason why market prices are still hot is due to scarce supply, which is believed to be due to the severe dry weather taking place in the two main producing countries of the world. No one dares to stand on the side of selling first. The real goods market always buys at the price to sell later and this approach has brought success in recent times, further reinforcing the increase in coffee prices.
The recent increase in coffee prices has brought positive movement to the Brazilian domestic physical coffee market. Growers were more present at sales, taking advantage of favorable opportunities, when high prices in both New York and London, combined with the rise and fall of the Real above 5.0 against the dollar, encouraged sellers. and bring greater liquidity to the market. Many growers are accelerating sales to ensure cash flow during the harvest.
According to a survey by SAFRAS, a famous seasonal trading consulting company based in London, as of April 9, growers in Brazil have committed to selling 89% of the 23/24 crop output. This figure is up 5% from the previous month and slightly higher than the same period last year, when 87% of production was sold. Furthermore, it is higher than the five-year average (2019 and 2023), which recorded commercialization of 88% of output during this period.
Sales of Conillon Robusta coffee continue at a rapid pace, driven by strong external interest. Prices above BRL 1,000 a bag have stimulated sales, reducing coffee availability and leaving little coffee for growers in the transition period between the 2023 and 2024 crop seasons in Brazil.
Conillon sales alone have reached 96% of output, a figure higher than the same period last year (91%) and higher than the 5-year average (92%).
The above numbers in Brazil are similar to those in Vietnam, once again confirming that the increase in coffee prices is actually a shortage of supply compared to demand for many reasons, not because of farmers holding goods. As many sources have reported recently.
Below is information about coffee culture:
With the participation of key Ethiopian coffee organizations, the non-profit Cup of Excellence (CoE) has announced the return of the 2024 Cup of Excellence Ethiopian coffee auction and competition program.
Following the inaugural Ethiopian CoE auction in 2020, which saw a 28-lot auction win $1.34 million, the 2022 Ethiopian auction saw the highest price ever paid for an Ethiopian coffee, at a staggering $400.50 per pound.
The Ethiopia CoE program was discontinued in 2023 after funding from the U.S. government’s Feeding the Future Value Chain Activity (FTFVCA) was no longer available. This year’s event is organized through a partnership between sister non-profit organization CoE, the Alliance for Coffee Excellence (ACE), the Ethiopian Coffee and Tea Authority and the Ethiopian Coffee Association.
CoE CEO Erwin Mierisch said in the announcement: “Ethiopia is considered the birthplace of Arabica coffee and is famous for its heirloom varieties so it is no surprise that farmers won the Cup of Excellence in 2022 broke the record”. “More than 600 samples have arrived at warehouses in the area even though notices were only recently sent to farmers.”
Unlike previous times, Ethiopia CoE 2024 will have two winning categories for two types of processing processes: Natural drying processing and Wet processing.
Since its inception in Brazil in 1999, CoE competitions and auctions have been held in 16 key coffee-producing countries, helping coffee farmers better understand and regularly set prices. exponentially higher than commodity prices.
This is one of the programs that strives to introduce the quintessence and value of coffee beans produced by farmers, in order to raise awareness of enjoyment as well as practical monetary value, contributing to the creation of coffee beans. sustainable coffee value on the world stage of producing countries.
Kinh Vu (giacaphe.com)
