World coffee prices recovered strongly on all domestic and international exchanges. Of which, robusta coffee prices reached 3,095 USD/ton.
Domestic coffee prices have increased compared to the same time yesterday, up from 1,000 - 1,100 VND/kg. Currently, the transaction price is very high, fluctuating between 83,800 - 84,600 VND/kg.
The highlight of this week's market developments is that although inventories on ICE exchanges have been replenished regularly in recent days, causing prices to fall in the short term, they are still hovering around a 24-year low, which is the main reason for the market's price increase.
Meanwhile, continued supply constraints, at least in the short term, have helped London futures prices recover significantly in yesterday's trading session. According to estimates from the General Statistics Office of Vietnam, coffee exports in February 2024 reached only 160 thousand tons, down nearly 20% compared to the same period last year, due to the long Lunar New Year holiday, so commercial activities slowed down somewhat.
From Brazil, the local currency Real, although continuing to fall sharply to a three-week low, still does not encourage farmers to increase exports when they do not really need the money. In addition, a market survey shows that coffee futures prices often increase when farmers in the world's largest coffee exporting country are harvesting the new crop, for Conilon robusta in April and May and for Arabica in June and July.
The stock of certified Arabica on the ICE-US exchange continues to recover, contributing to strengthening the supply situation in the market. At the end of the session on February 27, the amount of certified Arabica coffee on the ICE exchange increased by 992 bags of 60kg, bringing the total amount of coffee stored here to 333,771 bags of 60kg.
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| Domestic coffee prices today, March 1, increased sharply by 1,000 - 1,100 VND/kg in some key purchasing localities. (Source: YouTube) |
According to TG&VN, at the end of the last trading session of February (February 29), the price of robusta coffee on the ICE Futures Europe London exchange turned to increase well, the delivery term in May 2024 increased by 51 USD, trading at 3,095 USD/ton. The delivery term in July 2024 increased by 41 USD, trading at 3,026 USD/ton. The average trading volume was low.
Arabica coffee prices on the ICE Futures US New York floor also increased, with the May 2024 delivery period increasing by 2.60 cents, trading at 184.35 cents/lb. Meanwhile, the July 2024 delivery period increased by 2.35 cents, trading at 182.70 cents/lb. Trading volume was high on average.
Domestic coffee prices today, March 1, increased sharply by 1,000 - 1,100 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Coffee prices rebounded after the US inflation data was released as expected by the market, experts said. US prices continued to rise in January 2024, but at the lowest level in nearly 3 years, reinforcing speculation that the US Federal Reserve (Fed) will definitely cut interest rates in June.
The US Department of Commerce reported on February 29 that the country's personal consumption expenditures (PCE) price index rose 0.3% in January 2024 (compared to the previous month). In the 12 months ending in January 2024, the US PCE rose 2.4% - the lowest increase since February 2021 and following a 2.6% increase in December 2023.
Excluding volatile components such as energy and food, the US core PCE price index rose 0.4% in January 2024.
Core inflation in January 2024 increased 2.8% year-on-year, the smallest increase since March 2021 and following a 2.9% increase in the final month of 2023.
The Fed typically monitors the PCE to determine progress toward its 2% inflation target. A monthly reading of 0.2% is needed to bring inflation back to target.
Following the report, Wall Street's major stock indexes are expected to open higher in the trading session on the same day as inflation readings came in in line with estimates, raising hopes of a Fed rate cut in the first half of this year.
Mr. Peter Andersen, founder of investment management company Andersen Capital Management, assessed that the latest data made the market more optimistic that the US economy is on a solid foundation.
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