As a result, the price of Arabica coffee in December decreased by 2.70 cents and robusta coffee in January 25 closed down by $62, at $4,680/ton.
The reason for the weekend price drop is said to be the weak Brazilian real. The real fell to a one-month low on Friday trading.
However, most analytical information believes that low coffee inventories are still the dominant force, limiting the decline in coffee prices.
Information shows that the amount of certified graded Arabica coffee stored on the New York exchange decreased by 640 bags last Thursday, to 808,252 bags, and the amount of robusta coffee inventory has decreased to 808,252 bags. The lowest in 4 1/2 months was 4,191 lots on Friday.
Brazilian coffee growers once again accelerated sales of arabica coffee but slowed down the pace of negotiations with robusta/conillon coffee.
SAFRAS survey shows that, until October 9, coffee growers’ sales reached about 62% of Brazil’s 24/25 coffee crop, up 6% from the previous month.
Robusata/Conillon sales have slowed, as growers are refraining from selling due to recent sharp declines in prices. However, at the current price, it is still considered very expensive for the local roasting industry.
Coffee exports from Brazil continue to accelerate at the beginning of the new season. Data from Cecafé shows that in September, 4.12 million bags of green coffee were exported, of which 3.19 million bags were arabica coffee and 911 thousand bags were robusta/conillon coffee. Including 358 thousand bags of roasted coffee, total exports from Brazil in September reached 4.46 million 60 kg bags, up 33% over the same period last year.
Volume was 20% higher year-on-year. The highlight is conillon/robusta, which increased by nearly 50%, while Arabica exports increased by only 13% in the same period. In addition to higher volumes, prices rebounded, positively impacting revenue, which increased 55% over last year and totaled $3.11 billion in the first three months of the 24/25 trading season. .
It has been reported that Vietnam’s harvest has just begun on a light note, although there is still heavy rain in some places in the main growing area of the Central Highlands.
The US National Weather Service’s Climate Prediction Center has revised its forecast lower, saying there is only a 60% chance of a La Niña event occurring later this year, the previous forecast. Their result is a 74% chance of this negative weather phenomenon occurring.
La Niña is traditionally a phenomenon that brings heavy rainfall to Pacific Rim countries which affects coffee growing regions that can be affected by this climatic condition such as in Colombia, Indonesia and Peru , and may also affect drought conditions in Arabica coffee growing regions in Southeast Brazil. The intensity and timing of this type of weather will be closely watched by coffee market participants.
The price difference between Robusta in November and Arabica in December between the London and New York markets narrowed further during the weekend trading session, recording at 31.85 cents/pound. This shows that Robusta prices are returning to higher values.
Information says that the famous coffee company Starbucks will cooperate with coffee farms in Guatemala and Costa Rica to develop agricultural activities to find ways to minimize the increasing negative impacts of climate change on the world. with its supply chain.
Starbucks currently buys about 3% of the world’s Arabica coffee from more than 450,000 farmers in 30 countries. Despite its large purchasing power, Starbucks faces increasing challenges in supplying its more than 39,000 stores globally, especially as extreme weather continues to impact productivity in the country of origin. The world’s largest coffee exporter is Brazil.
Starbucks’ solution is to develop on-farm interventions, seed sharing, research and practices across the industry to help farmers mitigate the impacts of climate change,” said Michelle Burns, Vice President Executive Chairman of Global Coffee and Sustainability, Starbucks said.
Starbucks will research hybrid coffee varieties at both farms at different altitudes and soil conditions. The farm, in Costa Rica, will also explore the use of mechanization, drones and other technologies to support the workforce.
In other news about the effective date of the product import policy within the framework of European anti-deforestation laws.
Asian manufacturers welcome delay in EU anti-deforestation law
Producers from Malaysia’s palm oil industry to Vietnam’s coffee industry on Thursday welcomed the European Union’s decision to delay implementation of its anti-deforestation rules.
The year-long delay sparked immediate opposition from environmental groups, but the law is already facing significant opposition from many governments and industry. They have criticized the law, which is aimed at preventing the import of products that promote deforestation, for confusing rules and complex documentation requirements that they say will be particularly disruptive. burden on small farmers.
The EU’s decision to postpone creates a relief, according to Mr. Trinh Duc Minh, chairman of the Buon Ma Thuot Coffee Association. “The extension of time is necessary and reasonable,” he told AFP. He also noted that coffee prices, which had increased when companies stocked up ahead of time, may now decline.
When the law was passed in 2023, it was hailed as a major breakthrough in nature and climate protection. The law requires exporters of cocoa, soybeans, timber, livestock, palm oil, rubber, coffee — and goods derived from those products — to certify that their goods are produced on deforested land after December 2020.
Countries including Malaysia and Indonesia have spoken out against the new regulations and criticism is growing louder as the December implementation deadline approaches, with Brazil and the United States among those raising concerns. voice expressed concern. The Malaysian Palm Oil Council welcomed the proposed delay as a “victory for common sense”.
The decision is “a welcome relief for all businesses who have highlighted the need for a delay”, agency head Belvinder Kaur Sron said.
In addition to welcoming the delay in implementing this law, there are also strong voices of opposition from environmental activists, according to Ms. Uli Arta Siagian at Indonesian environmental group WALHI. She acknowledged the challenges in implementing the rules, but said there was no guarantee that a one-year delay would overcome those challenges. “For us, this decision is disappointing.”
In general, coffee prices will continue to remain in the high price bracket due to problems with inventory and output due to the impact of adverse weather in the two leading growing countries, Brazil and Vietnam.
Kinh Vu (giacaphe.com)
