The supply of Arabica coffee from the main producing countries in Central – South America seems to have been exhausted, causing ICE to transfer a very significant amount of coffee stored in Europe to the US…
Bieru London Robusta products September 2022, week 25 (from June 20, 2022 – June 25, 2022)
For the whole week of 25, the London market had 3 decreasing sessions and 2 increasing sessions. The price of Robusta coffee for September delivery fell all of 35 USD, or 1.68%, to 2,044 USD/ton and for November delivery fell all 37 USD, or 1.78%, to 2,037 USD. /ton, the reductions are very significant. Trading volume above average.
On the contrary, the New York market had 2 gaining sessions and 2 decreasing sessions. The price of Arabica coffee for September delivery fell all of 4.15 cents, or 1.82%, to 223.25 cents/lb and December delivery fell all of 4.85 cents, or 2. 14%, to 221.45 cents/lb, the declines are quite strong. Trading volume quite above average.
The price of green coffee beans in the Central Highlands market decreased by 700-800 VND, down to the range of 40,000-40,500 VND/kg.
Highlights of the week were a series of monetary base rate adjustments by major central banks in the world. This has made the USD value continue to strengthen in the basket of currencies and make the price of goods in general traded in greenback more expensive. There is a high probability that the Fed – US will continue to raise the base interest rate. A strong hand in the policy meeting in July to prevent excessive inflation will raise risk concerns, while the crisis in Eastern Europe has not shown any signs of abating and the global economic recession is getting worse. half.
Although both futures markets have entered the first announcement day (FND), the pressure from supply has not eased. The latest is the biennial report on the global coffee industry of the US Department of Agriculture (USDA) has forecast that global production will be about 174.95 million bags, an increase of 4.7% compared to the 2021 / crop year. Previous 2022 due to Brazil’s Arabica crop in the year of cyclically high production “two years one”. They also forecast that crop stocks in producing countries will increase by 6.3% to 34.70 million bags. This caused the price of coffee futures to crash right after the expiry date of the July futures contract on both exchanges.
Vietnam Customs announced that coffee exports in May reached 142,329 tons (equivalent to 2.37 million bags, 60 kg bags), down 9.6% compared to the previous month, bringing exports of the first 5 months of 2022 to reached a total of 881,565 tons (about 14.69 million bags), up 23.18% over the same period last year.
USDA also adjusted the forecast of Vietnam’s output in the upcoming coffee year 2022/2023 from 31.1 million tons to 31.58 million tons, of which Robusta coffee accounts for 94% of total production.
More striking is that, according to Reuters, about 100,000 bags of Arabica coffee from ICE warehouses in Antwerp Europe have been shipped to the US, reflecting dwindling supplies from producing countries. Traders expect an additional 250,000 bags will continue to leave Antwerp to the US within the next 2 months, accounting for a quarter of the current ICE certified reserve. This is something that has never happened in the past.
Follow Rabobankin the coming weeks prices will be volatile due to unstable demand and supply (the harvest in Brazil is delayed), logistical problems, conflict between Russia and Ukraine and winter in Brazil with the risk of frost.
English (giacaphe.com)
