July Arabica coffee traded on Friday closed down 5.35 cents/pound and Robusta coffee closed down $139/ton, at $3,541/ton.
Domestic coffee prices today continue to fall freely, some regions recorded a decrease of up to 15,000 VND/kg, many businesses announced to temporarily suspend purchasing.
Coffee prices on Friday extended this week’s sharp decline and hit a one-month low. Rising global coffee supplies are depressing prices after the International Coffee Organization (ICO) reported on Friday that global March coffee exports increased 8.1% year-on-year to 12.99 million. bags and global coffee exports from October to March increased by 10.4% over the same period last year, at 69.16 million bags.
A recovery in ICE coffee supplies also eased concerns and sent coffee prices lower after ICE-monitored Arabica coffee inventories rose to a one-year high and Robusta coffee inventories rose to their highest level. for 5 months on Friday.
On April 18, Arabica coffee hit a new 2-year high, and Robusta coffee futures most recently hit a new all-time high last Thursday. Coffee prices have skyrocketed in the past two months due to concerns about crops in Brazil and Vietnam. Robusta coffee rose to a new record high due to concerns that excessive drought in Vietnam will limit the country’s Robusta coffee output.
On March 26, Vietnam’s Ministry of Agriculture expected Vietnam’s coffee output in the 2023/24 crop year to decline -20% to 1,472 million tons, the smallest crop in four years, due to drought.
In addition, the Vietnam Coffee Association said that Vietnam’s 2023/24 coffee exports will also decrease -20% over the same period to 1,336 million bags.
In addition, please do not forget that Marex Group Plc forecasts that the global Robusta coffee deficit in 2024/25 will decrease by 2.7 million bags due to reduced production in Vietnam, in the recent severe drought situation in this country.
Currently, the main coffee growing regions in Vietnam have stable rain, but the information reported by farmers in the regions to a large Fan Page gathering Vietnamese coffee growers is that the rains only help. save the tree source that is too dry from death, the fruit source will certainly be greatly affected by fruit loss when there is not enough water and due to mealybugs raging in high temperature conditions.
The El Nino pattern often brings heavy rain to Brazil and drought to India and Vietnam, negatively impacting coffee production.
Heavy rains poured down in Brazil’s southernmost state of Rio Grande do Sul (this region does not grow coffee) on May 2, last Thursday, according to local time and date, killing 39 people.
According to CNN – Rio Grande do Sul’s civil defense agency said 68 people remained missing and at least 24,000 were displaced as storms affected more than half of the 497 municipalities in the state.
According to the United Nations, the incidence of high-intensity storms or tropical cyclones has increased due to warmer global temperatures. Heat waves are becoming more frequent and longer lasting.
The National Coffee Institute of Honduras (IHCAFE) reported preliminary data showing that the country’s coffee exports in April were 17,086 bags or 2.29% higher than the same period last year.
The Institute projects that exports from the current 2023/2024 crop year are forecast to be about 6.60% lower than the previous crop year, totaling 4.98 million bags.
Vietnam’s General Statistics Office on Monday reported that Vietnam’s April coffee exports increased 3.9% year-on-year to 170,000 tons and that Vietnam’s January-April coffee exports increased 5.4% over the same period to 756,000 tons.
The UK will celebrate May Bank Holiday next Monday, the Robusta coffee market in London will be closed on this day and the Arabica coffee market in New York will trade alone.
Stocks of certified graded Arabica coffee held on the New York market are said to have increased by 14,660 bags yesterday, taking the stock at 682,036 bags.
According to a coffee trader in Vietnam, the price of R2 coffee (13% moisture, 5% broken black, 1% Impurities, S13) FOB in Ho Chi Minh City is currently being paid by foreign buyers in London + 650$/ton, with the current USD/VND exchange rate of 1USD/25,415 VND, the theoretical purchase price without transportation and packaging is only in the range of 95,000-97,000 VND/kg for this type of coffee.
Previously, exporters were forced to increase purchasing prices due to a sudden increase in the market, in order to meet signed contracts, but now with the sharp decline in prices on the world market in recent sessions, certainly, the The exporter is forced to reconsider and bring the purchase price back to the real market. The domestic price situation will drop even more when the premium price is no longer high and buyers will no longer buy first and sell later as they did when the market price was increasing.
Kinh Vu (giacaphe.com)
