Robusta coffee prices increase sharply, Arabica prices decrease slightly, Fed prepares to raise interest rates

Coffee exports increased sharply in the first three weeks of August in Brazil, further strengthening data for expectations that coffee supplies will be guaranteed in the coming time.

World coffee prices fluctuated in the closing trading session this week (August 25).

On August 25, the US dollar rose to its highest level in more than two months and headed for its sixth consecutive week of gains. While the dollar recovered, commodity exchanges yesterday benefited from capital outflows from US stocks. US stock markets fell, crude oil fell, helping coffee recover slightly.

Global coffee prices are still under pressure from Brazil’s bumper new crop, which follows the country’s “biennial” cycle. Consultancy StoneX expects robusta coffee prices to end the year at around $2,300 a tonne, 28% higher than the end of last year, according to a Reuters survey published on August 16.

Meanwhile, the main robusta producing countries were negatively affected by the El Nino weather phenomenon on crop yields. Robusta coffee prices continued to record a recovery with a good increase in yesterday's session. Robusta inventories on the ICE remained at a record low, raising market concerns that strong exports in Brazil could ensure supply in the market. Arabica coffee prices returned to a downward trend due to pressure to boost exports in Brazil.

Giá cà phê hôm nay 25/4: (Nguồn: Freepik)

Domestic coffee prices increased by 100 VND/kg in key purchasing localities during the trading session on August 25. (Source: Freepik)

At the end of this weekend's trading session (August 25) on the international futures exchange, the price of robusta coffee on the ICE Futures Europe London exchange for November 2023 delivery increased sharply by 31 USD, trading at 2,437 USD/ton. The January 2024 delivery increased by 24 USD, trading at 2,349 USD/ton. Trading volume was low.

The price of Arabica coffee on the ICE Futures US New York exchange for December 2023 delivery fell 1.15 cents, trading at 153.1 cents/lb. Meanwhile, the price of March 2024 delivery fell 1 cent, trading at 154.3 cents/lb. Trading volume was low.

Domestic coffee prices increased by VND100/kg in key purchasing localities during the trading session on August 25.

Average price	Change
USD/VND exchange rate	23,780	+ 10
DAK LAK	65,100	+ 100
LAM DONG	64,400	+ 100
GIA LAI	64,500	+ 100
DAK NONG	65,200	0

Unit: VND/kg.

(Source: Giacaphe.com)

US Federal Reserve (Fed) Chairman Jerome Powell announced on August 25 that the agency is preparing to raise interest rates and keep them at the next level to reduce inflation.

“We are prepared to raise interest rates further if appropriate and intend to keep them at a limited level until we are confident that inflation is moving steadily toward our target,” Mr. Powell said at a central bank conference in Jackson Hole, Wyoming.

The greenback has become more attractive as a safe haven as investors await a speech from the Fed Chairman for guidance on interest rate policy.

The dollar index (DXY), which measures the U.S. currency against six other major currencies, rose 0.173% to 104.25, its highest level since June 7. The DXY index has risen more than 2% in August and is poised to end a two-month losing streak.

Philadelphia Fed President Patrick Harker and Boston Fed President Susan Collins — speaking in separate interviews — both welcomed the jump in Treasury yields, saying it could aid the central bank's efforts to cool the economy and return inflation to its 2% target. Both officials also left open the possibility that the Fed would hold off on raising interest rates if necessary.

New jobless claims fell last week as labor market conditions remained tight, new data showed.

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