Friday 17 May 2024
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Robusta coffee futures fall to six-week lows on improved weather prospects in Vietnam

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MILAN – Robusta coffee futures fell further on Tuesday as trading resumed after Monday’s Early May bank holiday. London’s July contract lost a further $163 yesterday, closing at $3.378, a six-week low and down 22.1% from an all-time high of $4,338 hit on April 25. Meanwhile, Arabica coffee futures in New York regained ground after five consecutive trading sessions in negative territory: the main contract for July delivery rose 145 points to settle at 196.65 cents.

The certified washed Arabica coffee stocks held against the New York Exchange continue to register gradual daily increases, recovering from the more than twenty-year lows recorded in November last year. They reached yesterday a new one-year high of 701,423 bags.

La Cimbali

Brazil is the main origin, accounting for over 48% of all certified inventories, followed by Honduras and Peru.

The sharp downward correction in Ice Robusta prices was prompted by long liquidations following a partial improvement in Vietnam’s weather conditions, which, by the way, remain worrying.

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Rain in Vietnam’s key coffee growing areas last week helped somewhat ease concerns about the next crop’s output.

After reaching all-time high of over 130,000 VND (5.1 USD) per kg, domestic coffee prices in Vietnam have dropped sharply in recent days.

On May 6, coffee prices stood at about 100,000 VND per kg, thus, down 30,000 VND per kg in less than one week.

Businesses expect that the upcoming harvest season in Indonesia and Brazil will generate new supply, easing supply tightness.

However, Indonesia’s next harvest is expected to be much lower than in previous years, with productivity levels set to remain low.

Moelyono Soesilo, Chairman of the Specialty Coffee & Industry Department of the Indonesian Coffee Exporters Association (AEKI), estimates this year’s production at 10.5 million bags, of which 8.8 million bags of Robusta and 1.8 million bags of Arabica, far below a potential national coffee production of 12-12.5 million bags.

CIMBALI

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