May Arabica coffee traded on Wednesday closed up 5.85 cents/pound and Robusta coffee closed up $149, sitting at $3,812/ton.
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Robusta coffee prices have set a record for acceleration, increasing by more than $330/ton in two consecutive sessions, supporting Arabica coffee to reach its highest level in the past 3 and a half months. Concerns about excessive drought in Vietnam in recent times, which has caused potential output losses, are pushing Robusta coffee prices to continue to increase sharply.
Coffee importer DRWakefield said on Wednesday that “weather conditions in Vietnam are not encouraging and there are concerns about a possible lack of irrigation water, which could affect coffee output for the crop.” next”.
Arabica coffee prices started the new week with price support due to concerns that recent heavy rains in Brazilian coffee growing areas could cause damage to coffee trees.
Next is the market’s assessment and perception when the supply of Robusta coffee is increasingly scarce from Vietnam, this is the main factor increasing prices.
Costa Rica’s National Coffee Institute (ICAFE) reported that the country’s coffee exports in March were 29.35% lower than the same month last year, totaling 94,379 bags. Thus, Costa Rica’s export volume in the 2023/2024 season up to now is 14.05% lower than the same period last year.
ICAFE has estimated coffee production for the 2023/2024 crop year will total 1.30 million bags or 13% lower than the previous coffee crop, this is mainly due to unfavorable weather.
Over the past year, global coffee stocks have decreased significantly. The reasons are attributed to a combination of factors, including coffee price growth over time, capital costs for inventories held in mature coffee markets as positive interest rates are established. held steady, amid a prolonged period of demand slowdown, as roasters stepped up their draw from consumer countries’ stockpiles.
The distribution and demand for Robusta coffee in the international market is increasing, and two consecutive years of production being lower than the estimate of about 2 million bags, the potential shortage comes from producers and exporters. Top Robusta coffee, Vietnam. Most recently, the escalation of tensions in the Red Sea has created unforeseen complications in shipping routes, container availability and ship schedule integrity, driving demand from roasters. switch to coffee reserves in the consuming country.
In its latest consumer stocks report, the European Coffee Federation, ECF reported that port coffee inventories, held in warehouses in Belgium, Germany, France, Italy and Spain, fell by 2 .47% in February 2024 to a total of 6,696,450 bags at the end of the month.
The above figure reported at the end of February 2024 is 42.88% lower than the same period last year, the coffee inventory at the port was registered up to 11,724,463 bags at the end of February 2023.
It is worth noting that the total Robusta inventory at the end of February, was 21.06% lower in the first two months of calendar year 2024 compared to the previous year, and consumed in only one month, which is considered very low compared to demand. The demand of roasters, through the above figure, shows us the general tightness prevailing in the Robusta coffee market.
The new Brazilian Robusta Conillon coffee crop is about to begin harvesting and the upcoming Brazilian Arabica coffee crop will begin harvesting near the middle of the year.
Certified Arabica coffee stocks held on the New York coffee market are said to have increased by 8,870 bags yesterday, reaching an inventory level of 604,079 bags. This marked a decrease of 18.68% compared to the same period last year, but an increase of 129.20% compared to the beginning of the quarter.
Certified Robusta stocks on the London Exchange are said to have increased by 25,500 bags in the week to March 27, 2024, sitting at a relatively low level of 507,833 bags. This is still about 59.58% lower, compared to the same period last year.
The instability of this year’s weather globally is also reflected in the price of cocoa globally, which is currently testing a record high of up to 10,000 USD/ton due to unfavorable weather conditions. in key cocoa production areas such as West Africa.
If the situation does not improve soon, which is clearly unlikely to improve soon, cocoa prices will likely continue to rise. The same upward trend persists with coffee prices.
Weather is a major factor here, especially in countries like Brazil and Vietnam, which play an important role in the global coffee market.
Currently, Arabica coffee prices are moving sideways compared to the beginning of the year. Buyers are currently testing Arabica limits around the 200 cent mark.
If the bulls successfully overcome the indicated limit, it seems that the next target will be around 215 cents.
Below we would like to turn to the domestic price situation
This morning, companies in the Central Highlands provinces have reference purchase prices as follows:
- Kontum: 102.8k
- GiaLai: 102.8k
- Dak Lak: 102.7k
- DakNong:103
- Lam Dong: 102.3
Please note that prices after 10:00 a.m. daily are subject to revision by the Companies and Purchasing Agents.
Kinh Vu (Giacaphe.com)
