The Brazilian weather forecast next week will have favorable rains, causing the liquidation of long-term net positions and investors taking profits at the end of the year, causing coffee futures prices to plummet…
At the end of the year-end trading session, Robusta coffee prices on the ICE Europe – London exchange reversed and decreased. The March delivery term decreased by 95 USD, to 2,841 USD/ton and the May delivery term decreased by 92 USD, to 2.8757 USD/ton, very strong decreases. Trading volume is average.
Similarly, the price of Arabica coffee on the ICE US – New York floor has the same decreasing trend. March delivery futures decreased by 9.70 cents, to 188.30 cents/lb and May delivery futures decreased by 9.55 cents, to 186.20 cents/lb, the declines are also very strong. Trading volume is quite above average.
The price of green coffee today in the Central Highlands provinces decreased by 1,800 – 1,900 VND, fluctuating in the range of 67,300 – 67,800 VND/kg. Fresh coffee prices trade around 15,000 VND/kg.
Most commodity markets dropped quite sharply in the last trading session of the year. Coffee futures prices are no exception. According to many observers, the year-end session witnessed liquidation, profit-taking of funds and speculation, in the context of no change in fundamental factors. Dryness in Brazil in recent months and the formation of the El Nino weather phenomenon in the Pacific Rim have caused concerns that supply from countries in the world’s largest Robusta producing region will decrease by at least about 6 million bags in the upcoming coffee season.
During the year, Arabica coffee prices have accumulated a value decrease of 26.57% while Robusta coffee prices, on the contrary, have accumulated a value increase of 19% due to concerns about supply shortages.
Two coffee futures exchanges have dropped dramatically, despite forecasts that the weather could be hot and rainy in the first quarter of 2004 in Minas Gerais state, Brazil’s largest Arabica coffee producing state, with expectations of achieving high production. record amount of a year with a cyclical harvest ‘two years one’.
English (giacaphe.com)
