May Arabica coffee traded on Monday closing down 1.40 cents/pound and Robusta coffee closed slightly down $2 at $3,742/ton.
Coffee prices in the early trading session of the week gave up early gains and closed moderately lower, with Arabica coffee falling from its highest level in nearly 6 months to return to defensive levels after the Coffee Organisation. Coffee International reported that global coffee exports in February increased 6.8% year-on-year to 11.33 million bags and that total global coffee exports for the 2023/24 crop year from October to March 2 increased by 11.1%. compared to the same period to 56.2 million bags.
Fears that excessive drought in Vietnam will limit domestic Robusta coffee production and push prices of this commodity to a high last Thursday and Arabica coffee to a 6-month high early in the session. Monday.
Coffee price details today March 9, 2024
On March 26, Vietnam’s Ministry of Agriculture projected that coffee output in the 2023/24 crop year could decrease by 20% to 1.472 million tons, the smallest crop in four years, due to drought. In addition, the Vietnam Coffee Association also said that Vietnam’s 2023/24 coffee exports could decrease by 20% over the same period to 1.336 million tons.
In addition, Marex Group Plc forecasts that the global Robusta coffee deficit in 2024/25 will be about 2.7 million bags, the main cause being the lack of output from Vietnam.
Component long position report from the New York Arabica coffee market shows that non-commercial speculators increased their net long position by 25.60%.
Also reporting this position, in the Robusta coffee market in London, fund managers slightly increased their net buying position to 2.77%. All are as of Tuesday, April 2, 2024. Thus, compared to the buying position of fund managers, which has continuously increased over the past time, this is the lightest increase, reasonable buying pressure from This world has somewhat stagnated.
Forecasters say there will be good rainfall across large areas of Brazil’s coffee-growing region this week. Rain is forecast to increase next week across the Espirito Santo, Bahia, Parana and Sao Paulo areas, with rain expected to arrive in Minas Gerais state this weekend.
The Brazilian Real has lost 3.19% in value over the past three weeks and was at a month-low against the US Dollar on Friday. Normally, a weakening of the Brazilian Real against the US Dollar would encourage increased sales from Brazil. However, producers are relatively well funded and they are becoming cautious as Brazil’s current coffee export year comes to a close. There is little incentive for stronger sales activity at this time, given the record high coffee prices for Robusta and the coffee futures market environment.
Weather conditions in Vietnam are still considered hot and dry. Although there has been rain in some places, some main production areas have not received the necessary rainfall in a situation where rivers and lakes are all dry.
Weather forecasters predict a gradual increase in rainfall towards the end of the month.
Inventories of certified graded Arabica coffee held in the Arabica market were reported to have decreased by 14,755 bags on Friday, placing the stock at 613,462 bags.
US employment data released last Friday showed signs of strong growth, the US dollar was firmer during the day, and the unemployment rate fell lower than expected.
The recent increase in prices of Robusta products has caused the stock prices of Starbucks and Luckin Coffee to come under strong pressure this year.
In their view, sadly, coffee prices still have a lot of room to increase because of ongoing supply concerns. Countries like Vietnam and Indonesia are experiencing some of the worst heat waves in recent years. As a result, their exports are expected to fall by more than a fifth this year.
Coffee, like cocoa, is a complex commodity in that it cannot be easily substituted. That means farmers cannot quickly return to growing coffee to immediately meet world demand. On average, it takes a coffee tree several years to begin to yield a harvest.
Returning to Vietnam’s domestic price situation, although prices closed down last weekend, the strange thing is that the buying price on the domestic market still increased.
Kinh Vu (Giacaphe.com)
