Coffee prices continue negative trend, will supply from Brazil flood into the market?

Coffee prices continued their negative trend due to strong new crop selling pressure from the world's largest coffee producer and exporter.

Robusta coffee prices have maintained a prolonged inverse structure in the near term, while Arabica has continued to decline. Demand for spot coffee is very high, so the futures markets. Supply on the London floor continues to be at a record low and there have been no new additions recently.

The domestic coffee market today continued to decrease compared to the same time yesterday.

At the end of the weekend trading session on the international futures exchange (August 11), robusta coffee prices on the ICE Futures Europe London exchange increased and decreased in opposite directions. Robusta coffee futures for September 2023 delivery increased by 6 USD, trading at 2,672 USD/ton. Futures for November delivery decreased by 17 USD, trading at 2,517 USD/ton. Trading volume increased above average.

Arabica coffee prices on the ICE Futures US New York exchange continued to fall, with the September 2023 delivery contract down 2.10 cents, trading at 157.8 cents/lb. Meanwhile, the December 2023 delivery contract fell 1.95 cents, trading at 157.7 cents/lb. Trading volume was high.

Giá cà phê hôm nay 23/7: (Nguồn: YouTube)

Domestic coffee prices today, August 12, continued to decrease by 200 - 300 VND/kg in key purchasing localities. (Source: YouTube)

Brazilian farmers had sold 41% of their 2023/24 crop so far in early August, slightly below the 45% recorded at the same time last year and below the historical average of 46% for the season, according to a report by consulting and analytics firm Safras & Mercados. Meanwhile, Cooxupé, the largest coffee cooperative in Brazil and the world, reported that its members have so far harvested more than 70% of their coffee growing areas and that the weather remains favorable for drying beans to achieve higher quality.

Meanwhile, the Vietnam Customs General Department's Coffee Export Report shows that Vietnam's supply, mainly robusta coffee, reached 1.81 million bags in July, down 7.6% year-on-year but up 36.09% compared to the initial estimate of the Vietnam General Statistics Office.

Domestic coffee prices today, August 12, continued to decrease by 200 - 300 VND/kg in key purchasing localities.

Average price	Change
USD/VND exchange rate	23,570	- 0
DAK LAK	67,300	- 200
LAM DONG	66,600	- 300
GIA LAI	66,700	- 300
DAK NONG	67,500	- 200

Unit: VND/kg.

(Source: Giacaphe.com)

Overall, the market is negative following monthly export data reports from the world’s leading coffee producing and exporting countries. These export data reports have eased concerns about short- and medium-term supply shortages. This has prompted technical corrections by funds and speculators in the world coffee futures market.

Meanwhile, the pressure to sell new crops continues to increase as Brazilian farmers are in the final stages of harvesting. Notably, there is additional support from the weakening Real exchange rate, which is causing Brazil to sell heavily on the market.

Observers say Brazilian farmers have already harvested 80% of the crop, with the outlook for this season’s output rising 7.5% year-on-year. Coffee supplies from Brazil are expected to flood the market in the near future.

Source