At the close of trading on October 11, 2024, the global coffee market witnessed notable developments. Robusta coffee prices on the London exchange ended a month-long decline and recovered, while Arabica coffee prices continued their slight upward trend. The domestic coffee market also reflected this trend, with slight increases in some localities.
However, amidst these positive signals, the coffee market remains affected by many uncertainties, making short-term price forecasting difficult.
Robusta's recovery: Is it a positive sign?
Robusta coffee prices have recovered from their lowest level in a month, a positive sign for the market. This is believed to be due to stable demand for Robusta coffee, while supply is showing signs of tightening.
According to the International Coffee Organization (ICO), Robusta coffee prices are getting closer to Arabica coffee prices, something that rarely happened before, while coffee exports in major global markets continue to surge to record levels.
However, the resurgence of Robusta should be viewed with caution.
Firstly, Robusta prices have yet to break out of their lowest levels in the past six months, indicating that the market has not fully recovered. Secondly, there is still an oversupply of Robusta coffee in several countries, particularly Vietnam, the world's largest producer of Robusta coffee.
Arabica prices continued to rise slightly, but were held back.
Arabica coffee prices recorded their second consecutive day of gains, indicating that demand for this type of coffee remains high. However, the increase was restrained by the depreciation of the Brazilian Real.
The depreciation of the Brazilian Real has prompted Brazilian coffee producers to increase sales, leading to downward pressure on the Arabica market. Furthermore, the drought situation in Brazil remains a major concern. While forecasts of rain in the coming weeks may improve the situation, the damage caused by the drought is far from being fully remedied.
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| Coffee price forecast for tomorrow, October 12, 2024: What factors are impacting the coffee market? |
Domestic coffee prices have risen slightly in some localities, averaging an increase of 100 VND/kg. However, this price increase does not fully reflect the complex developments in the international coffee market.
In particular, the fact that the price of fresh coffee beans at the beginning of this year's harvest reached a record high in many years, up to 20,000 VND/kg in Dak Lak and Dak Nong, is a worrying sign. This indicates that coffee production costs are rising, which could lead to upward price pressure on the domestic market in the near future.
Coffee prices are forecast to continue rising, but risks remain.
Based on the above analysis, coffee prices tomorrow, October 12, 2024, may continue their slight upward trend, but risks remain. The recovery of Robusta may be a bright spot, but it is necessary to note the potential risks from the drought in Brazil and the low coffee production in Vietnam.
Meanwhile, Arabica is likely to continue its slight upward trend, but the increase will be restrained by the depreciation of the Brazilian Real. The domestic coffee market may also see a slight increase, but the risk of rising production costs is a significant concern.
Investors, businesses, and farmers interested in the coffee market should closely monitor market developments, especially information on rainfall in Brazil and coffee production in Vietnam, to make appropriate investment decisions. In addition, careful consideration is needed when buying and selling coffee, avoiding buying high and selling low, and finding ways to cope with the complex changes in the market.
*This information is for reference only.
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