Coffee market breaks out strongly, pulling up raw material market

Arabica coffee prices increased by nearly 3.8% to $7,070 per ton while Robusta coffee prices recorded an increase of nearly 4.4% to $3,664 per ton.

Arabica coffee in Medan, North Sumatra, Indonesia (Photo: AFP/VNA)

According to the Vietnam Commodity Exchange (MXV), coffee became a standout performer yesterday, with both Arabica and Robusta coffee rising by approximately 4%, acting as the main driving force for the entire raw materials market.

Conversely, selling pressure prevailed across many commodity groups, with silver leading the decline in the metals market, losing nearly 2%.

At the close of trading, the MXV-Index extended its recovery streak to a fourth consecutive day, rising 0.4% to 2,177 points.

At the close of trading on August 11th, the positive trend continued across most commodities in the industrial raw materials group. Coffee stood out among them.

Specifically, Arabica coffee prices rose by nearly 3.8% to $7,070 per ton, while Robusta coffee prices recorded an increase of nearly 4.4% to $3,664 per ton.

According to MXV, concerns about a shortage of Arabica coffee supply supported the upward trend in coffee prices yesterday.

Many producers predict a significant drop in Brazil's coffee production in 2025-2026, with Arabica production potentially decreasing by 12-30%.

Farmers harvest coffee in Espírito Santo (Brazil) (Photo: AFP/VNA)

According to a report from Pine Agronegocios, key coffee-producing regions and markets are currently operating with limited inventories, making a significant price drop unlikely, especially given that weather conditions for the next crop season are not yet truly favorable.

The latest data from the ICE Exchange shows that Arabica coffee inventories continue to decline, reaching their lowest level in over 14 months, at just 737,609 bags.

Robusta inventories monitored by ICE also fell to a two-week low of 6,981 lots yesterday, after peaking at a one-year high of 7,029 lots on July 28.

According to data from the Secex (State Department of Foreign Trade), average daily coffee exports in the first six days of August reached only 6,100 tons, a sharp decrease of 35.4% compared to the average of 9,400 tons/day in August 2024.

In the first six days of the month, the total export volume only reached 36,500 tons, significantly lower than the 207,000 tons exported in the entire month of August last year.

In the coffee derivatives market, the Commitment of Traders report shows quite clear activity from large fund groups.

During the trading week ending August 5, 2025, short-term managed money funds increased their net long positions by 0.21%, to 21,459 lots.

Conversely, Index Funds, with their long-term investment orientation, slightly reduced their net long positions by 4.52%, maintaining them at 31,569 lots for the day.

Farmers harvesting coffee beans (Photo: AFP/VNA)

On the London robusta market, hedge funds slightly reduced their net short positions by 3.12% during the past trading week, to 5,671 lots, equivalent to approximately 945,167 bags.

This development indicates that net selling positions remained mostly sideways and showed little fluctuation after the previous period of active trading. Meanwhile, on the domestic coffee market, offers at export warehouses continued to remain low as foreign buyers stopped inquiring due to high prices, resulting in warehouses not making new offers.

According to information from warehouses, coffee harvesting is expected around October-November, so warehouses are not in a hurry to import goods and are mainly waiting for clearer signals from the market.

According to MXV, the metals market also attracted investor attention yesterday as it led the decline; in particular, in the precious metals market, silver closed down nearly 2% at $37.79 per ounce, the deepest daily drop since the beginning of August.

This development clearly reflects a shift in investor sentiment as a series of macroeconomic factors have eroded the safe-haven role of this precious metal.

The downward pressure on prices stems from the White House's strategic move in its relationship with Beijing. US President Donald Trump signed an executive order extending trade truces for another 90 days, until early November.

The market immediately interpreted this as a signal of reduced geopolitical risk, thereby weakening the demand for holding silver as a hedge. The second factor came from the move to reassure the gold market.

Mr. Trump asserted that gold would not be subject to tariffs – a statement that dispelled the risk previously hinted at by the U.S. Customs and Border Protection (CBP).

This information has made gold a magnet for investment among precious metals, while reducing the appeal of silver, which is often seen as an "alternative" when gold is at risk.

The third factor was the recovery of the US dollar. The DXY index rose 0.35% to 98.52 points, making silver, priced in USD, more expensive for buyers holding other currencies. The combined effect of reduced risk aversion and a strong USD led to a noticeable decrease in physical demand for silver during the session.

Finally, the anticipation of upcoming US inflation (CPI) data is restraining new buying activity in the silver market.

Analysts forecast core CPI to rise 0.3% in July compared to the previous month, amid expectations that the Federal Reserve (Fed) will cut interest rates by 25 basis points at its September meeting, which remains high at 85.9% according to the CME FedWatch tool.

Investors are temporarily staying on the sidelines to assess the inflation picture and monetary policy, further hindering the silver market's recovery momentum.

On the domestic market, silver prices on the morning of August 12th fell by more than 1% compared to the previous session, to 1.188-1.222 million VND/ounce in Hanoi and 1.190-1.228 million VND/ounce in Ho Chi Minh City, closely reflecting international price movements.

Source: https://baolangson.vn/thi-truong-caphe-but-pha-manh-me-keo-thi-truong-hang-hoa-nguyen-lieu-5055808.html