May
Prices have now decreased by up to 25% compared to the peak reached at the end of April. Expert Nguyen Quang Binh said that coffee on the two exchanges regained its upward momentum after the decline at the beginning of the week, partly due to the weakening of the USD.
However, the number of transactions on the floor decreased significantly. Experts speculate that speculators have not bought in after the previous strong sell-off. In the early morning of May 15 on the US market, the US Dollar Index (DXY), measuring fluctuations in the greenback with six major currencies (EUR, JPY, GBP, CAD, SEK, and CHF), decreased by 0.20%, down to 105.02.
The USD turned down in the last trading session after US producer prices unexpectedly increased in April 2024, in the context of a sharp increase in the cost of goods and services, showing that inflation is still anchored at low levels. high at the beginning of the second quarter.
The US Department of Agriculture’s Foreign Agricultural Service (FAS) predicts that Brazil’s 2023/24 Arabica coffee production will increase by 12.8% over the same period to 44.9 million bags due to increased productivity. higher, and the planted area increases.
FAS also forecasts that coffee production in the 2023–24 crop year in Colombia, the world’s second-largest producer of Arabica coffee, will increase by 7.5% over the same period to 11.5 million bags. The market is continuing to monitor the weather in Vietnam and harvest progress in both Indonesia and Brazil today.
In addition to information about a sharp increase in inventory on both the London and New York exchanges, the latest report from the New York and London markets shows that non-commercial speculators and hedge fund managers have reduced their buying positions.
This explains the reason why prices dropped sharply in the days before May 7, when these two components liquidated their buying positions in both markets. It is possible that the progress of Brazil’s 2024 coffee crop will further increase prices while increasing negative pressure on the market, as happened at the beginning of last year’s crop.
However, good sales volumes in recent weeks, with producers actively participating at a time of rising prices, have helped reduce risks as the crop arrives. Experts say that, despite the decrease, the market is still in a very favorable area for sellers.
The market will continue to monitor the weather in Vietnam and harvest progress in both Indonesia and Brazil. Arabica coffee inventories monitored by ICE were reported on May 13 to have increased to their highest number in 13 months, at 721,723 bags. In addition, on the same day, Robusta coffee inventories were also reported to have increased to a 5 and a half month high of 4,071 lots.
The amount of coffee exported has tended to decrease in recent months. In April alone, it reached only 152,073 tons, worth nearly 573 million USD, down 19.5% in volume and 14.7% in value compared to the previous month, and at the same time, down 7% in value compared to the same period last year. quantity but increased 43.6% in value.
This is the third consecutive month that coffee exports have decreased compared to the same period last year, a sign that supply in the current crop year may be running out. At the end of the first 7 months of the 2023–2024 crop year (from October 2023 to April 2024), coffee exports reached more than 1.1 million tons, down 1.5% compared to the same period of the 2022–2023 crop year.
With this result, Vietnam has exported about 65–70% of the total expected output of about 1.6–1.7 million tons in the current crop year. In April, Vietnam’s export coffee price reached an average of 3,768 USD/ton, up 6% over the previous month and 54.5% over the same period last year.
In the first four months of the year, export prices increased by 49.1% to an average of 3,389 USD/ton. Regarding the market, the EU was Vietnam’s largest coffee-consuming market in the first 4 months of the year, accounting for 40.8% of total export volume with 300,885 tons worth more than 1 billion USD, an increase of 5.8% in terms of export volume and quantity and a 62% increase in value compared to the same period in 2023.
In particular, the amount of coffee exported to Germany decreased by 2.8%; Italy increased by 4.8%; Spain increased by 53.7%; and the Netherlands increased by 60.5%. .. Japan ranked next with 50,134 tons, worth 181.1 million USD, an increase of 32.6% in volume and an increase of 84.2% in value over the same period. .
In addition, the amount of coffee exported to a number of other markets in Asia also increased compared to the same period last year, such as Indonesia (up 75%), the Philippines (122%), China (33%), Thailand, especially (204%), Malaysia (68%), etc.
Source: Tincaphe.com
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