Coffee prices suddenly turn around and fall sharply, is it likely to continue to fall deeply?

Coffee prices today, November 8, turned down sharply as pressure from new crop supplies from Vietnam increased, while both derivatives exchanges were in overbought territory.

World coffee prices have started to fall sharply in both the international and domestic futures markets after two sessions of strong increases. However, the market's decline is considered to be as predicted, as the USD recovers and pressure from new crops from Vietnam increases.

Meanwhile, trading positions on both derivatives exchanges are in overbought territory. The London exchange fell by the same amount as yesterday's increase, but the domestic market fell sharply.

Domestic coffee prices today dropped sharply by 1,200 when the 2023-2024 coffee harvest has begun for 1 month.

However, the current inventory data on the Intercontinental Exchange (ICE) is still very low, raising concerns about the ability to ensure sufficient supply in the market, thereby continuing to support the price increase. The report ended on November 6, the standard Arabica inventory on the ICE-US decreased by 12,454 60kg bags, bringing the total amount of coffee stored to 347,555 bags. This is the lowest inventory level recorded in more than 24 years. Meanwhile, the Brazilian Real continues to rise against the USD, preventing farmers in this country from selling coffee for export.

Giá cà phê hôm nay 8/11, (Nguồn: Rodeo West)

Domestic coffee prices today November 8 sharp decrease - 1,200 VND/kg in some key purchasing localities. (Source: Rodeo West)

At the end of the trading session on November 7, the price of robusta coffee on the ICE Futures Europe London exchange for January 2024 delivery decreased by 62 USD, trading at 2,360 USD/ton. The March 2024 delivery period decreased by 35 USD, trading at 2,326 USD/ton. Average trading volume.

Arabica coffee prices on the ICE Futures US New York exchange for December 2023 delivery decreased by 2.4 cents, trading at 171.3 cents/lb. Meanwhile, the price for March 2024 delivery decreased by 2.2 cents, trading at 169.5 cents/lb. Trading volume was very high.

Domestic coffee prices today November 8 sharp decrease - 1,200 VND/kg in some key purchasing localities.

Average price	Medium
USD/VND exchange rate	24,120	- 10
DAK LAK	57,400	- 1,200
LAM DONG	56,700	- 1,200
GIA LAI	57,300	- 1,200
DAK NONG	57,300	- 1,200

Unit: VND/kg.

(Source: Giacaphe.com)

The International Coffee Organization (ICO) September Trade Report shows that global coffee exports in the first 10 months of the 2022/2023 coffee year fell by 5.7% compared to the same period in the previous year. The Coffee Exporters Association (Cecafé) in Brazil reported that coffee exports in September fell by nearly 20% to 2.4 million bags, the lowest level in the past 6 years.

Reports of US economic indicators growing below expectations, which will cause the Fed to pause interest rate hikes, while information that OPEC+ will continue to cut production has supported risky assets and stocks to extend the winning streak.

Coffee prices in the 2023-2024 crop year are forecast to be stable, not decreasing compared to the present, because the quality of Vietnamese coffee has been increasingly improved. Moreover, the coffee consumption market has become increasingly stable.

Vietnam currently exports coffee to more than 80 countries. Of which, the EU is a large consumer market, accounting for 38.3% of the country's total coffee export volume.

According to the Import-Export Department - Ministry of Industry and Trade, in the third quarter of 2023, Vietnam's coffee exports to all market regions decreased compared to the previous quarter, but the export rate to Asia and Europe decreased at a lower rate. Compared to the third quarter of 2022, Vietnam's coffee exports to most regions decreased, except for Asia and Africa.

By market, in the third quarter of 2023, Vietnam's coffee exports to most markets decreased, except for Thailand, which increased slightly compared to the second quarter of 2023. Compared to the third quarter of 2022, coffee exports to many markets decreased, but exports to Japan, Spain, the Philippines, China, the UK, etc. increased.

Source