Domestic coffee prices increase sharply, weather is the "deciding factor" in the market

Global coffee prices rose about 20% last quarter amid hot weather in major coffee-growing regions in Asia, according to Nikkei Asia.

Coffee price today 7/7/2024

World coffee prices increased simultaneously on both exchanges.

Domestic coffee prices have increased by about 4,400 - 4,800 VND/kg in the past 6 days, with the highest transaction price recorded at 124,100 VND/kg and the lowest at 122,900 VND/kg.

The market has been broadly higher over the last few sessions of the week, but technically, coffee prices could fall in the short term due to what is considered “extreme” net long positions in futures contracts by hedge funds, according to analyst Mike McGlone. Meanwhile, certified graded Arabica coffee inventories on the New York Mercantile Exchange are gradually increasing again, climbing to levels last seen in February 2023, reaching 823,726 bags on July 2.

But the downward trend is not considered to be a “long-term” trend, as the market seems to be convinced that the supply from Vietnam is not optimistic. Bloomberg analyzed that the price of robusta coffee futures has recently increased again because traders closely monitor the rainfall in Vietnam and they believe that the results are lower than normal and will certainly affect the country's output.

Parts of the Southeast Asian nation are likely to receive enough rain to slightly increase soil moisture levels, which have been overestimated in the past, according to forecaster Maxar. Hot, dry weather damaged large swaths of Vietnam earlier this year, raising concerns about the next harvest.

Domestic coffee prices on July 6 increased by 600 VND/kg in some key purchasing localities. (Source: Foodyoushouldtry)

According to the World & Vietnam, at the end of the trading session this weekend (July 6), the price of robusta coffee on the ICE Futures Europe London exchange continued to increase, with the September 2024 delivery period increasing by 46 USD, trading at 4,199 USD/ton. The November 2024 delivery period increased by 49 USD, trading at 4,034 USD/ton. Trading volume was low.

Arabica coffee prices on the ICE Futures US New York exchange continued to increase, with the September 2024 delivery term up 4.75 cents, trading at 238.95 cents/lb. Meanwhile, the December 2024 delivery term increased 4.50 cents, trading at 226.55 cents/lb. Trading volume was high on average.

Domestic coffee prices on July 6 increased by 600 VND/kg in some key purchasing localities. Unit: VND/kg

Average price	Medium
USD/VND exchange rate	25,208	0
DAK LAK	123,600	+ 600
LAM DONG	122,900	+ 600
GIA LAI	123,600	+ 600
DAK NONG	124,100	+ 600

(Source: giacaphe.com)

Robusta coffee futures in London rose more than 18.1% in late June from the end of March, hitting a record high of $4,394 a tonne on June 6. Arabica coffee futures rose 20.6%. The gains came even as the FTSE/CoreCommodity CRB Index, an international benchmark for commodities, hovered around 290 at the end of June, almost unchanged from the end of March.

The heatwave in Southeast Asia is the main reason for the spike in coffee prices. Since April, average temperatures in Thailand, the Philippines and Vietnam have been hotter than usual.

Masanobu Takano, an expert working in the coffee and tea department at the Kobe-based commodity trading company S. Ishimitsu & Co, said that last year's robusta coffee harvest was poor, so concerns about a second consecutive year of decline in output have pushed up coffee prices.

The heat wave isn’t just affecting Asia. Last May was the hottest month on record globally, according to the US National Oceanic and Atmospheric Administration. Average temperatures surpassed the previous record high for the month set in 2020.

Source: https://baoquocte.vn/gia-ca-phe-hom-nay-772024-gia-ca-phe-trong-nuoc-tang-manh-thoi-tiet-dang-la-yeu-to-quyet-dinh-thi-truong-277678.html