Will coffee prices continue their sharp decline?

The forecast for coffee prices on June 12, 2024, in the domestic market is for a continued sharp decline. Coffee prices are being pressured by the faster pace of coffee harvesting in Brazil, which promises to improve the supply of coffee, which has been strained for some time, especially for Robusta.

The weakening of the Brazilian real during the session was another negative impact on coffee prices, as the real fell to its lowest level in 17 months against the dollar on Monday, trading around 5.36 real to 1 USD.

The fluctuations in Arabica coffee prices during the session are believed to be supported by news of a lack of rain in Brazil. The Somar Meteorological Agency reported on Monday that the Minas Gerais region of Brazil had received no rain over the past week.

Domestic coffee prices today halted their upward trend, ranging from 123,000 to 124,200 VND/kg. Currently, the average purchase price in the Central Highlands provinces is 124,100 VND/kg, with the highest purchase price in Dak Nong province at 124,200 VND/kg.

Specifically, the purchase price of coffee in Gia Lai province (Chu Prong) is 124,000 VND/kg, while in Pleiku and La Grai it is 123,900 VND/kg. In Kon Tum province, the price is 124,000 VND/kg; in Dak Nong province, coffee is purchased at the highest price of 124,200 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 coffee beans) is 123,000 VND/kg.

Today's coffee prices (June 11th) in Dak Lak province are as follows: in Cu M'gar district, coffee is being purchased at approximately 124,000 VND/kg, while in Ea H'leo district and Buon Ho town, it is being purchased at the same rate of 123,900 VND/kg.

Following the decline in domestic coffee prices, online coffee prices today on the three exchanges in London, New York, and Brazil showed mixed movements, with some increasing and others decreasing.

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

Specifically, the price of Robusta coffee futures contracts for July 2024 delivery on the London exchange was $4,275/ton, down $150 from the beginning of the trading session. The September 2024 contract was $4,128/ton, down $166; the November 2024 contract was $3,978/ton, down $159; and the January 2025 contract was $3,820/ton, down $155.

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 11, 2024, decreased across all contract periods, fluctuating between 219.75 and 221.10 cents/lb.

Specifically, the July 2024 delivery contract was 221.10 cents/lb, down 0.30 cents/lb from the start of the session. The September 2024 contract was 221.95 cents/lb, down 0.05 cents/lb; the December 2024 contract was 220.75 cents/lb, down 0.15 cents/lb; and the March 2025 contract was 219.75 cents/lb, down 0 cents/lb.

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

Brazilian Arabica coffee prices at 8:30 PM on June 11, 2024, showed a decrease across all contract periods, ranging from $266.55 to $277.35 per ton.

Specifically, the July 2024 delivery contract was $277.35, down $4.50. The September 2024 delivery contract was $271.90/ton, up $0.75 from the start of trading; the December 2024 delivery contract was $268.75/ton, up $0.70; and the March 2025 delivery contract was $266.55/ton, down $3.50.

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 19:00 to 02:35 (the next day), Vietnam time.

According to Brazilian market consulting firm Safras & Mercado, as of June 4th, the progress of the 2024/2025 coffee harvest in Brazil had reached 29%, higher than the 26% of the same period last year and compared to the 27% average of the past five years.

Specifically, the harvesting progress for Conillon/Robusta coffee has reached 42% of the projected yield; for Arabica coffee, it has reached 23% of the projected yield, both higher than the average of the past 5 years.

Notably, preliminary reports indicate that both the yield and quality of Robusta coffee in Rondônia state are lower than expected. This may lead Brazil to revise down its Robusta coffee production estimates for this season. Rondônia state is Brazil's fifth-largest coffee-growing region and its second-largest producer of Robusta coffee.

This information has somewhat boosted Robusta coffee prices on the world market.

According to forecasts from the US Department of Agriculture (USDA), Brazil's coffee production this season could reach 69.9 million bags (60 kg/bag); of which, Arabica coffee production is expected to increase by 7.35% and Robusta coffee production is estimated to increase by 1.4%. These figures are currently slightly higher than forecasts from market research firms.

Besides supply and demand factors, world coffee prices are also under downward pressure from the continued rise of the US dollar. Early this morning, June 11th, the US Dollar Index, which measures the strength of the US dollar against other major currencies worldwide, continued to rise, reaching over 105 points.

The strengthening US dollar makes commodities priced in this currency, such as coffee, more expensive for investors worldwide. Speculators become more sensitive, increasing their investments in high-risk financial markets such as commodity futures markets, including the coffee market.

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

Source: https://congthuong.vn/du-bao-gia-ca-phe-ngay-1262024-gia-ca-phe-tiep-da-giam-manh-325623.html