World coffee prices have increased sharply on all domestic and international exchanges.
Domestic coffee prices have increased sharply, returning to above VND80,500/kg, currently fluctuating between VND79,500 - VND80,600/kg.
Robusta coffee prices increased mainly due to technical corrections on both futures exchanges. Liquidation pressure has decreased and the USD has weakened. Specifically, the pressure of the first announcement day (FND - in New York on February 21 and in London on February 26) has encouraged funds and speculators to continue to balance their current net positions, making technical corrections on both coffee futures exchanges.
US inflation data fell in January but was still higher than expected, making the Fed's rate-cutting cycle slower than expected, sending the DXY back under pressure. The dollar fell for a second straight session after a series of US economic data is unlikely to deter the Federal Reserve from cutting interest rates in June, the first since the Covid-19 pandemic.
In addition, the record low inventory since 2014 also helped Robusta coffee regain its upward momentum. Data reported by ICE – Europe on February 15 continued to decrease by 1,440 tons, or 6.15% compared to the previous day, down to 21,990 tons (about 366,500 bags, 60 kg bags), which will continue to support the market's upward price trend.
Expected increases in ICE-US Certified Arabica inventories and recent rains in key Brazilian coffee growing regions, although still below historical averages, are leading to farmers increasing irrigation rates for Conilon, which should help limit the price increase.
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| Domestic coffee prices today, February 17, increased by 1,400 - 1,500 VND/kg in some key purchasing localities. (Source: YouTube) |
According to TG&VN, at the end of this week's trading session (February 16), the price of robusta coffee on the ICE Futures Europe London exchange continued to increase, with the delivery date for March 2024 increasing by 26 USD, trading at 3,231 USD/ton. The delivery date for May 2024 increased by 33 USD, trading at 3,141 USD/ton. Trading volume was low.
Arabica coffee prices on the ICE Futures US New York exchange increased, with the March 2024 delivery period increasing by 1.55 cents, trading at 190.85 cents/lb. Meanwhile, the May 2024 delivery period increased by 1.55 cents, trading at 186.70 cents/lb. Average trading volume.
Domestic coffee prices today, February 17, increased by 1,400 - 1,500 VND/kg in some key purchasing localities.
Unit: VND/kg. (Source: Giacaphe.com) |
Dak Lak coffee growing area is currently over 200,000 hectares and is the "Coffee Capital" of Vietnam, accounting for 1/3 of the country's area. In the 2022 - 2023 crop year, the total coffee output of the province reached 558,729 tons; Dak Lak coffee is exported to 61 markets around the world. In particular, the Buon Ma Thuot Coffee Geographical Indication has been protected in 32 countries and territories.
Vietnam is the world's largest supplier of robusta coffee and the impasse is adding fuel to robusta prices as supplies in Europe become very tight.
Farmers in Vietnam, one of the world’s largest coffee exporters, are refusing to deliver coffee they have sold unless futures prices are renegotiated after global prices soared to a 28-year high, Reuters reported. Despite having written contracts, global traders say it is not worth suing local suppliers because of the costs involved.
The poor harvest has pushed prices much higher, and farmers feel they cannot afford to deliver at agreed prices and have sought to renegotiate contracts. The impasse initially affected only local Vietnamese dealers, but has now spread to the broader market, tightening global supplies and helping push the world price benchmark to its highest level since 1995.
Vietnam is expected to have its worst crop in six years in 2022/23, and some contracts have been extended into 2023/24, meaning farmers need a large crop to meet all their commitments. However, this season’s harvest is also expected to be low.
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