World coffee prices this week, Robusta coffee futures for July delivery increased by 68 USD. Arabica coffee futures for July delivery decreased by 5.75 cents.
Since the beginning of last week, the pressure of the July options contract expiration on both exchanges has pushed funds and speculators to continue liquidating their net positions due to overbought conditions. The weakening of the USD after the decision of the US Federal Reserve (Fed) to keep the current interest rate unchanged and the possibility of further interest rate hikes in the year-end meetings, until US inflation shows positive results, has impacted coffee futures prices.
Robusta’s rise was also due to the fact that inventories on the London floor fell to a six-week low and key sources are having difficulty meeting demand, with Vietnamese producers showing signs of exhaustion, amid high global demand for robusta. Meanwhile, the pressure on Arabica coffee harvest is increasing, as reports of dry weather in major growing regions in Brazil help coffee cherries ripen quickly, which will help farmers speed up the new crop.
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| Domestic coffee prices decreased by 100-200 VND/kg in some key purchasing localities, during the weekend session (June 17). (Source: Coffeeam) |
Domestic coffee prices increased by an average of VND2,000/kg last week. Last week, domestic coffee prices increased by VND3,000/kg. Therefore, as of the closing session last week - June 16, domestic coffee prices have set a new peak, exceeding VND66,500/kg.
At the end of this weekend's trading session, robusta coffee prices on the ICE Futures Europe London exchange turned slightly down. Robusta coffee futures for July 2023 delivery fell by $8, trading at $2,796/ton. September delivery futures fell by $10, trading at $2,747/ton. Average trading volume.
Arabica coffee prices on the ICE Futures US New York exchange decreased. The July 2023 delivery contract decreased by 2.1 cents, trading at 184.90 cents/lb. Meanwhile, the September 2023 delivery contract decreased by 2.2 cents, to 180.75 cents/lb. Trading volume was high on average.
Domestic coffee prices decreased by 100-200 VND/kg in some key purchasing localities, in the last session of last week (June 17).
Unit: VND/kg. (Source: Giacaphe.com) |
The New York arabica coffee futures exchange will be closed for a national holiday today, June 19.
The domestic coffee price increase is expected to continue as it continued to set new records in June.
Robusta coffee production in many countries is forecast to decrease sharply due to the impact of El Nino. In the first 7 months of the 2022-2023 crop year (October 22, 2022 to April 23, 2023), global coffee exports decreased by 6.2% (4.77 million bags) compared to the same period last year to 72.2 million bags.
The latest survey shows that as of June 10, the price of robusta coffee for July delivery on the New York floor has reached a record of 2,728 USD/ton, up 46% compared to the beginning of this year. The price of arabica coffee has also increased but at a lower amplitude, increasing by about 19-20% compared to the beginning of the year, reaching 190.7 US Cent/lb for the near term. We believe that the upward trend in robusta coffee prices will continue when Vietnam's supply is exhausted.
Accordingly, the output for the 2022-2023 crop year is about 1.5 million tons, plus 100,000 tons of overlap from the previous crop year, for a total supply of 1.6 million tons. The US Department of Agriculture (USDA) estimates that Vietnam's coffee output for the 2022-2023 crop year will decrease by 6% compared to the previous crop year, down to 29.7 million bags (60 kg/bag).
The world's largest robusta producer is set to have its lowest harvest in four years due to higher production costs (labor, fertilizer) and farmers shifting to more profitable crops.
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