Jul
In the context of “one market alone,” Robusta coffee’s price increased sharply. The recent decline in the USD is also a factor.
factor that stimulates price increases. Domestic coffee prices increased compared to the same time yesterday, trading in the range of 122,000–123,000 VND/kg.
The recent decline in the USD is also a factor in stimulating price increases. In the early morning of July 5, 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 0.28%. , down to 105.13.
In financial markets, the USD fell as US economic data was just released, which was lower than expected, showing that the US economy is slowing after the number of initial applications for unemployment benefits increased last week.
Meanwhile, Robusta Coffee is also supported by the information that coffee exports from countries are decreasing, as recorded by many large suppliers such as Vietnam, Indonesia, Costa Rica, etc. The market’s top concern. The situation is that coffee inventories in Vietnam are very scarce, leading to tight global supply.
According to a report by the Department of Crop Production (Ministry of Agriculture and Rural Development), Vietnam’s coffee area is 709,041 hectares, the yield is 29.8 quintals/ha, and the total output reached 1,953,990 tons of green coffee.
Major coffee-growing areas are experiencing drought and pests, causing coffee output in the 2023–2024 crop year to be estimated to decrease by 20% compared to the previous crop year, to 1.47 million tons. This is the lowest level in 4 years, sharply reducing the supply of Robusta coffee on the world market.
Consulting firm Hedgepoint offers three scenarios for forecasting Vietnam’s coffee output in the 2024–2025 crop. In the worst-case scenario, coffee output is only 27 million bags. In the most positive scenario, output is forecast to only reach a maximum of 28.7 million bags.
This agency said that no matter what happens, coffee inventories in Vietnam are still scarce, leading to tight global supply and high price fluctuations compared to the same period in previous years.
According to Nikkei Asia, in the last quarter, world coffee prices increased by about 20% amid hot weather in major coffee-growing areas in Asia. At the end of June, Robusta coffee futures prices in London increased by more than 18.1% compared to the end of March and reached a record high of 4,394 USD/ton on June 6.
Arabica coffee futures prices increased by 20.6%. The increase occurred even though the FTSE/CoreCommodity CRB index, an international index for the general commodity market, still fluctuated around 290 at the end of June, almost unchanged from the end of March.
Crude oil futures prices, a key factor contributing to the above index, have decreased by about 1-2% over the same period. The heat in Southeast Asia is the main reason why coffee prices soared. Since April, the average temperature in Thailand, the Philippines, and Vietnam has been hotter than normal.
Expert Masanobu Takano, working in the coffee and tea department at commodity trading company S. Ishimitsu & Co., headquartered in Kobe (Japan), commented that last year’s Robusta coffee harvest was poor. So concerns about output continuing to decline for the second consecutive year have pushed up coffee prices.
Meanwhile, hot weather doesn’t just affect Asia. According to the US National Oceanic and Atmospheric Administration, last May was the hottest month on record globally. Average temperatures surpassed the record high for the month set in 2020.
Source: KTĐT.vn
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