MILAN – The downward correction in Arabica coffee futures continued on Monday, with prices falling a further 2.8% in yesterday’s session. In New York, the contract for July delivery lost 555 points, closing at 195.20 cents, trading below the $2 per pound mark for the first time since early April. Meanwhile, the London market was closed in observance of the Early May bank holiday.
Prices were affected by new trade data released on Friday by the International Coffee Organization showing a recovery in world coffee exports, which grew in the first half of the 2023/24 coffee year by 10.4% to 69.16 million bags. All coffee groups, including Robustas, saw increased volumes during this period.
Also contributing to the downward pressure on the Ice Arabica was the rise in certified stocks to a one-year high.
Weather update from Brazil reported severe floods displacing thousands in the southernmost state of Rio Grande do Sul, which, however, did not affect coffee areas.
In Vietnam, central highlands have experienced increased rainfall during the first week of May, which was well needed after a drier than normal month of April.
One might comment however that weather forecasters are still expecting lower than average rainfall for the month of May, which will be closely monitored by coffee market players, points out I. & M. Smith in its latest report.
Traditionally the rain season within Vietnam should begin in April and run through to around October each year.
Vietnam brokers reported on Monday steep falls on robusta export differentials as the physical market adjusts to sharp losses on Robusta futures last week.
After reaching all-time high of over 130,000 VND (5.1 USD) per kg, domestic coffee prices have dropped sharply in recent days.
On May 6, coffee prices stood at about 100,000 VND per kg, thus, they declined about 30,000 VND per kg in less than one week.
The current price is around 100,000 VND per kg in Central Highlands provinces, the coffee cultivation hub of Vietnam, report local media
Preliminary figures from Vietnam’s General Department of Customs (GSO) show that in the first four months of this year, the country’s coffee exports neared 670,000 tons, up 4.6 percent compared to the same period in 2023.
