Tuesday 23 July 2024
  • La Cimbali

Coffee futures prices rebounded strongly in the first session of the week on weather and tight supply

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Demuslab

MILAN – After last Friday’s partial setback, which was weighed down by USDA forecasts on world production and exports, the two main coffee futures markets soared in yesterday’s session. The Ice Arabica contract for September delivery gained as much as 5% (+1,125 points) to close at 236.25 cents, the highest level since mid-April.

September ICE Robusta contract jumped to $4,252 (+3.6 per cent), nearing the record highs reached earlier this month.

The fundamentals driving the coffee futures markets remain basically unchanged.

Despite Usda’s optimism, the outlook in Brazil and Vietnam remains uncertain and this contributed to the strong recovery seen in this start of the week.

Analysts say the weather situation in Brazil remains problematic. While the dry weather in Minas Gerais is helping the harvest, there is a risk of a serious water deficit, which could exacerbate vegetative stress of the trees.

Dealers also said that shipping delays in Brazil were limiting the flow of conillon (Robusta) coffee and helping to tighten supplies in major consuming countries.

Exports from Vietnam were running well below year-ago levels so far this month after a steep year-on-year decline in May.

According to data from the General Department of Customs (GSO), Vietnam shipped 862,400 tonnes between the beginning of the year and mid-June, down more than 8% in volume but up 38% in value compared to the same period last year.

The country’s average coffee export price reached $3,475 per tonne in the first five months of the year, up 41% year-on-year.

In the early days of June, the price of Robusta coffee in the domestic market increased compared to the end of May.

According to the Ministry of Agriculture and Rural Development, there is currently very little coffee inventory left in the domestic market.

The Vietnam Coffee Cocoa Association (Vicofa) expects coffee exports to earn about $4.5-5 billion this year.

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