Coffee prices turn down sharply?

Coffee prices on June 23, 2024, in the domestic market are expected to continue to fall sharply. The domestic coffee market reversed its upward trend and is now declining compared to the same time yesterday. Coffee prices are trending downwards following a report from the US Department of Agriculture last week stating that global coffee production for the 2024/25 crop year will increase, and ending inventories for the 2024/25 crop year will also rise.

The agency forecasts that world coffee production in the 2024/25 crop year will increase by approximately 4.2%, reaching 176.235 million bags, with Arabica production increasing by 4.4% to 99.855 million bags and Robusta production increasing by 3.9% to 76.38 million bags. Ending stocks for the 2024/25 crop year are expected to increase by 7.7% compared to the 2023/24 crop year. The main reason for this is the higher yield in Brazil.

Brazil's coffee harvest is currently accelerating, a factor that has contributed to the decline in coffee prices. Increased inventories and a stronger US dollar have also caused markets on both exchanges to fall.

Coffee market expert Nguyen Quang Binh commented that, from a macroeconomic perspective, coffee prices depend heavily on the Fed's decision to lower interest rates. The market rises when there is hope for an early interest rate cut, and falls when disappointed.

According to the expert, this week, as soon as there is news of the Fed cutting interest rates, funds and speculators will immediately return to buying. This will push prices up on both exchanges.

Steven Blitz, an economist at GlobalData TS Lombard, said in a report published on June 19 that there is a 60% chance that Fed Chairman Jerome Powell will surprise the market and cut interest rates next month.

With recent economic data showing cracks forming in the housing and labor markets, interest rate cuts could happen sooner than most markets expect. "The Fed is likely to ease in July," said Steven Blitz. Lower interest rates would be a boost for coffee prices, helping them rebound strongly.

Domestic coffee prices, updated at 4:30 AM on June 24, 2024, are as follows, according to www.giacaphe.com: today's domestic coffee prices range from 120,500 to 121,600 VND/kg. Currently, the average purchase price in the Central Highlands provinces is 121,500 VND/kg, with the highest purchase price in Dak Nong province at 121,600 VND/kg.

Specifically, the purchase price of coffee in Gia Lai province (Chu Prong) is 121,500 VND/kg, while in Pleiku and La Grai it is 121,400 VND/kg; in Kon Tum province it is 121,500 VND/kg; and in Dak Nong province, coffee is purchased at the highest price of 121,600 VND/kg.

In Lam Dong province, in districts such as Bao Loc, Di Linh, and Lam Ha, the price of bulk green coffee beans (green coffee beans, fresh green coffee beans) is 120,500 VND/kg.

Today's coffee prices (June 24th) in Dak Lak province are as follows: in Cu M'gar district, coffee is being purchased at approximately 121,500 VND/kg, while in Ea H'leo district and Buon Ho town, it is being purchased at the same rate of 121,400 VND/kg.

London Robusta coffee prices (Image: Screenshot from giacaphe.com)

World coffee prices updated at 8:10 PM on June 24, 2024 (Vietnam time) on the London exchange: Robusta coffee futures contracts for July 2024 delivery on the London exchange were at US$4,474/ton, up US$175 from the beginning of the trading session. The September 2024 contract was US$4,270/ton, up US$166; the November 2024 contract was US$4,079/ton, up US$146; and the January 2025 contract was US$3,890/ton, up US$111.

New York Arabica coffee prices (Image: Screenshot from giacaphe.com)

Similarly, Arabica coffee prices on the New York exchange today, at 8:30 PM on June 24, 2024, increased across all contract periods, fluctuating between 228.85 and 234.70 cents/lb.

Specifically, the September 2024 delivery contract was 234.70 cents/lb, up 9.70 cents/lb from the start of the session. The December 2024 contract was 232.40 cents/lb, up 9.15 cents/lb; the March 2024 contract was 231.05 cents/lb, up 9.40 cents/lb; and the May 2025 contract was 228.85 cents/lb, up 9.35 cents/lb.

Brazilian Arabica coffee prices (Image: Screenshot from giacaphe.com)

Brazilian Arabica coffee prices today, at 8:30 PM on June 24, 2024, showed mixed movements. Specifically, the July 2024 delivery contract was $284.25/ton, down 4.90%; the September 2024 contract was $286.00/ton (up 12.10%); the December 2024 contract was $282.80/ton (up 12.10%); and the March 2025 contract was $269.05/ton, down 7.10%.

Robusta coffee traded on the ICE Futures Europe exchange (London exchange) opens at 4:00 PM and closes at 12:30 AM (the next day), Vietnam time.

Arabica coffee on the ICE Futures US (New York exchange) opens at 4:15 PM and closes at 1:30 AM (the next day), Vietnam time.

For Arabica coffee traded on the B3 Brazil exchange, trading hours will be from 7:00 PM to 2:35 AM (the following day), Vietnam time.

According to Reuters, coffee growers in Vietnam have been severely affected by the worst drought in nearly a decade, raising concerns about higher espresso prices worldwide. Domestic forecasts for the next harvest in Vietnam – the world's second-largest coffee producer – remain bleak.

According to Nguyen Ngoc Quynh, Deputy Director of the Vietnam Commodity Exchange (MVX), production is expected to decrease by 10-16% due to extreme heat in the Central Highlands coffee-growing region from March to early May.

The return of rain in recent weeks has improved the supply outlook, but it remains uncertain whether this will help boost production and lower prices for Robusta – the type of coffee bean commonly used in espresso and instant coffee. Vietnam is currently the world's leading producer of Robusta beans.

According to many traders and analysts, wholesale prices in Vietnam and Robusta coffee futures traded in London rose to record highs earlier this year, mainly following a poor harvest in Vietnam and concerns about the next harvest after the drought.

This information is for reference only. Prices may vary depending on the location.

Source: https://congthuong.vn/du-bao-gia-ca-phe-ngay-2562024-gia-ca-phe-quay-dau-giam-manh-327935.html