World coffee prices reversed and fell across the board, due to pressure from new crop supply. Arabica coffee prices fell sharply as trading volume increased. Coffee prices also returned to a downward trend due to liquidation by funds and speculators, balancing commodity portfolios, and the impact of the ongoing new crop harvest in Brazil.
Domestic coffee prices have continuously set new peaks, reaching a record high of VND64,000/kg in recent days, up about 40% since the beginning of the year. Today, coffee prices have cooled down but remain high.
Adding to the negative trend in coffee futures markets is the latest FAS report on Vietnam’s unexpected coffee output in the 2023/2024 crop year. The 5.21% figure came as a surprise to coffee growers and most agricultural experts as much of the coffee acreage has been converted for higher profits.
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| Domestic coffee prices today, May 26, decreased by 400 VND/kg in some key purchasing localities. (Source: YouTube) |
Meanwhile, sales pressure for Brazil’s new crop is increasing as the South American agricultural giant has increased its coffee acreage by 1.9%, bringing total output this year up 14.7% to 54.74 million bags of all types of coffee in the same “biennial” cycle for high yields, according to the second crop survey report of Conab – Brazil.
At the end of the trading session on May 25 on the international floor, the price of robusta coffee on the ICE Futures Europe London floor adjusted down. The price of robusta coffee futures for July 2023 delivery decreased by 20 USD, trading at 2,553 USD/ton. The price of September delivery decreased by 22 USD, trading at 2,508 USD/ton. Trading volume was below average.
Arabica coffee prices on the ICE Futures US New York exchange continued to fall. The July 2023 delivery contract fell 5.3 cents, trading at 182.7 cents/lb. Meanwhile, the September 2023 delivery contract fell 5.1 cents, to 180.65 cents/lb. Trading volume increased sharply.
Domestic coffee prices today, May 26, decreased by 400 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
US stocks recovered after the US debt deal was more positive, causing investors to shift capital back to the stock exchanges, putting coffee futures prices at a disadvantage.
In the robusta market, technical parameters show that the price trend is not clear. It is expected that in the short term, the price of robusta coffee futures for July 2023 will continue to fluctuate and accumulate within the range of 2500 - 2600. The price range of 2495 - 2500 is the near support zone of robusta coffee prices. If this price range is lost, robusta can establish a downtrend.
ICE New York-traded inventories have been falling steadily over the past three months and hit a five-and-a-half-month low of 620,633 as of May 23. The news has helped support arabica prices.
The technical trend in the market is showing neutral signals, the price trend is not clear. It is expected that in the short term, the price of Arabica coffee futures for July 2023 will fluctuate and accumulate within the range of 185 - 190. Arabica coffee prices need to touch and maintain above 190 to have a chance to continue increasing. On the contrary, 180 - 182 is the near support zone of the price, if it loses the base of 180, it may trigger strong selling pressure.
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