Saturday 15 June 2024
  • La Cimbali

Coffee markets close mixed on stronger real, lack of fresh news from key producing areas in Brazil and Vietnam

In Vietnam, prices have climbed above the 100,000 dong/kg mark in recent days amid continued uncertainty. Farm gate prices in the Central Highlands areas are currently around 100,400 to 101,500 dong, up from 94,000 to 97,000 dong last week

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MILAN – Coffee markets closed mixed on Thursday, in a lack of fresh news from Brazil and Vietnam. In New York, the benchmark contract closed down 150 points, at 197.90 cents per lb, driven down by a stronger real gaining ground against the greenback and a further increase in certified stocks that reached a new 13-month high of 749,878 bags.

The exchange has issued an amendment to their contract rules in response to the new EU deforestation regulation. This is an attempt to more seamlessly integrate the new regulation into the coffee sector and provide further clarity and transparency for the players involved.

In London, the main contract for July delivery of the Ice Robusta closed up $18 at $3,420, not far from intraday highs, in a session characterised by a relatively thin trading range.

In Vietnam, prices have climbed above the 100,000 dong/kg mark in recent days amid continued uncertainty. Farm gate prices in the Central Highlands areas are currently around 100,400 to 101,500 dong, up from 94,000 to 97,000 dong last week.

Tuan Loc Commodities said in a note this week that farmers were diligently caring for their plantations and filling every available slot with new young trees after benefiting from good income this season and low fertiliser prices.

“We’ve seen a lot more rains in May in comparison with previous months but we still have to wait and see,” said a trader based in the coffee belt quoted by Reuters, adding farmers had sold most of their stocks.

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According to Vietnam’s National Weather Agency, rainfall in Vietnam’s Central Highland, the main coffee-growing region, totalled 195.6 mm in the ten days from May 1, 41% below the long-term average.

In Brazil, the long harvesting season has now begun and will end close to next spring. The Robusta harvest is already in full swing. Arabica harvesting is gaining pace in some regions. According to experts, in the south of Minas Gerais, in the warmer areas, harvesting operations are already well underway, with producers in the fourth week of harvest.

As the Brazilian winter is approaching, the risk of frost is bound to increase the volatility of the Arabica market in the coming weeks.

Coffee markets ihe coming months will be marked by the transition from El Niño to La Niña. The latter is expected to be of moderate intensity and should not have a major impact on global production.

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