Coffee price today March 24: Trading around record level of 95,000 VND/kg
At the end of the weekend trading session, Robusta coffee prices on the ICE Europe – London exchange reversed to decrease. The May delivery period decreased by 27 USD, down to 3,358 USD/ton and the July delivery period decreased by 24 USD, down to 3,264 USD/ton, both very significant decreases. Trading volume was at an average level.
Similarly, Arabica coffee prices on the ICE US – New York exchange also decreased. The May delivery contract decreased by 0.85 cents to 184.85 cents/lb and the July delivery contract decreased by 0.65 cents to 184 cents/lb, both slight decreases. Trading volume remained very high above average.
Online coffee prices on London, New York, BMF floorsUpdated: 03/24/2024 at 13:24:01 (delay 15 minutes)
Online coffee prices on London, New York, BMF floorsUpdated: 03/24/2024 at 13:24:01 (delay 15 minutes)
Coffee prices in the Central Highlands market fluctuate between 94,400 - 95,000 VND/kg.
Overall, the London market had 3 sessions of increase and 2 sessions of decrease. Robusta coffee futures for May delivery increased by 50 USD, or 1.51%, to 3,358 USD/ton and futures for July delivery increased by 53 USD, or 1.65%, to 3,264 USD/ton, significant increases. Trading volume remained above average.
Similarly, the New York market had 2 sessions of increase and 3 sessions of decrease. The price of Arabica coffee futures for May delivery increased by 2.10 cents, or 1.15%, to 185.05 cents/lb and the price of July delivery increased by 2.55 cents, or 1.40%, to 184.20 cents/lb, both significant increases. Trading volume was very high above average.
Coffee prices in the Central Highlands market fluctuated between VND94,400 - 95,000/kg. During the week, the coffee market tended to increase. At the end of the week, localities recorded an increase of VND1,800 - 2,000/kg compared to the beginning of the week.
Specifically, Lam Dong province increased by VND2,000/kg to VND94,400/kg. Traders in Gia Lai and Dak Lak provinces purchased coffee at a common price of VND94,800/kg, an increase of VND1,800/kg compared to the beginning of the week. With the same increase, Dak Nong province raised the coffee price to VND95,000/kg. Currently, coffee prices in key provinces are recorded at around VND94,400 - VND95,000/kg.
During the week, DXY edged up 0.1% after the announcement that it would maintain its three-rate cut schedule by 2024. This has encouraged funds and speculators to return to commodity markets to increase buying. Meanwhile, ICE inventory reports on both exchanges were strongly replenished. Arabica rose to an 8-1/2-month high of 586,077 bags, off a 24-year low reported in early October 2023. Robusta rose to a 7-week high of 29,280 tons, mostly Brazilian Conilon Robusta.
The DXY continued its upward trend over the weekend after news that the Swiss National Bank (SNB) had cut the Swiss Franc interest rate by 0.25% to 1.5%/year and the possibility that the Bank of England (BoE) could start cutting interest rates, before that the Brazilian Central Bank (BC) had cut the Reais interest rate by 0.5% to 10.75%/year, which helped slow down Brazilian sales, and the Bank of Japan raised the Yen interest rate by 0.1%, ending the negative interest rate that had lasted since 2016. Prices in most commodity markets have softened.
Robusta coffee inventories issued by the London Certified and Tracked Exchange, as of Friday, March 22, increased by 2,030 tons, or 7.45% compared to a week earlier, to 29,280 tons (about 488,000 bags, 60 kg bags), a fairly strong increase, contributing to the downward trend of coffee futures prices.
In a December 2023 report, the US Department of Agriculture (USDA) said that Vietnam, the world's largest producer of Robusta coffee, is expected to supply 26.6 million 60-kg bags of coffee in the 2023-24 crop year (October 2023 - September 2024). That figure is down 12% from the USDA's June forecast.
This forecast comes amid a record low output for the 2022-2023 crop year, at 26.3 million bags.
Output in Indonesia, the world's third-largest producer, is forecast to fall 20%.
In addition to unfavorable weather such as high temperatures and drought in Southeast Asia caused by the El Nino phenomenon, some farmers are switching to growing other more efficient crops such as durian, rubber, etc., which is also the reason for the decline in coffee production.
Global coffee bean consumption is expected to increase by 20% between 2023 and 2024 compared to 2013 and 2014, with notable growth in Asia. USDA reports that consumption in major producing countries such as Vietnam and Indonesia increased by 60% and 90%, respectively, during the same period. China, the world’s seventh-largest coffee consumer, is expected to see a 130% increase.
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