May Arabica coffee prices traded alone on Monday after a long holiday closed up 2.95 cents, sitting at 191.8 cents/pound while the Robusta coffee market was still closed for the Easter holiday.
Arabica coffee prices dropped at the beginning of the trading session, but then rebounded when there was news that recent heavy rains may have damaged coffee trees in Brazil.
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Today’s green coffee price in the Central Highlands provinces increased by 200 VND/kg to fluctuate in the range of 98,700 – 99,000 VND/kg.
Brazil’s Minas Gerais region received 75.4 mm of rain over the past week, or 335% of the historical average, meteorological agency Somar Meteorologia reported Monday.
The increase in the coffee market at the end of the session was somewhat limited because the Brazilian real during the session fell to its lowest level in the past 5 months compared to the dollar.
Robusta coffee prices rose to a record high last Wednesday, after the Vietnam Coffee Association said the day before that Vietnam’s 2023/2024 coffee exports may decrease. up to 20% over the same period due to dry weather reducing output.
It is also worth mentioning that Marex Group Plc forecasts a global Robusta coffee deficit 2024/2025 is about 2.7 million bags due to reduced production in Vietnam.
Farmers’ process of gradually changing crop types is now becoming more drastic, contributing to the long-term reduction of Vietnam’s coffee output, as they gradually cut down coffee trees, requiring more water for irrigation. than the durian tree, which has now grown and reached its shade.
Thus, Arabica coffee once again successfully tested the 190 cent mark, partly due to the increase of Robusta coffee on the London market. This is how the market reacted to the decline in inventories in Europe, which totaled only 6.7 million bags at the end of February, according to information from the European Coffee Federation published by Reuters.
Volume was 41% lower year-on-year. Some believe that it is simply the industry’s attitude of intentionally reducing inventory and doing so when needed by ordering roasters on term basis, which has contributed to reducing the amount of inventory.
However, the main factor leading to the decline in stocks in Europe is clearly supply constraints, due to the limited availability of Robusta coffee in Asia and logistical difficulties on the Asia-Pacific route. Europe due to instability in the Red Sea.
Production in Vietnam, the world’s main Robusta coffee growing country, is predicted by the USDA to reach 27.5 million bags this crop year. 23/24 much lower than the previously preliminary forecast of 31.3 million bags.
Years of low financial returns for Vietnamese growers have led to a decline in investment. The area planted with other crops such as black pepper and fruit also decreased.
The dry climate and high temperatures in recent years have compounded production losses and reduced output, resulting in tight supply, reflected in current low inventories.
Starting today, April 2, the two markets will be open during summer trading hours, The London market will open from 15:00 to 23:30New York will be open from 3:15 p.m. to 0:30 a.m. – Vietnam time.
Kinh Vu (giacaphe.com)
