Summary of coffee market week 49 (December 2, 2019 - December 7, 2019)
Arabica coffee prices continue to rise sharply when global supply is forecast to be in shortage in the current crop year 2019/2020 and the quality of Brazilian Arabica coffee beans will decline due to the lack of rainfall in growing regions, while The pressure to sell new crop protection products from producing countries is still weighing on the Robusta London market
For the whole week 49, the London market had 1 down session and 4 up sessions. Robusta coffee price for immediate delivery in January increased by all US $ 17, which is up 1.23%, to US $ 1,402 / ton and for March delivery increased all US $ 6, which increased by 0.43%, to US $ 1,412 / ton, slight increases. The trading volume maintained quite high above the average.
Similarly, New York market had 2 decreasing sessions and 3 rising ones. Arabica coffee futures for immediate delivery in March increased by 5.75 cents, or 4.83%, to 124.8 cents / lb and futures for March delivery gained 5.7 cents, an increase of 4, 7%, to 126.95 cents / lb, sharp increases. Trading volume remained very high above the average.
The price of green coffee in the Central Highlands market increased by VND 100, fluctuating in the range of VND 33,300 - VND 33,700 / kg.
Arabica coffee prices continued the strong recovery momentum after touching 88.0 cents / lb, a 14-year lower level in early May 2019. In particular, the Reais exchange rate continued to drop to a record low level, which encouraged Brazilians to sell aggressively, while the prolonged US-China trade tensions have contributed to slowing global economic growth. In return, investors shifted capital to find a safe haven, causing the price of securities and gold prices to skyrocket. The monthly export volume of the world's leading coffee maker has increased continuously since the beginning of the coffee year 2018/2019. According to the October 2019 statistics of the World Coffee Organization (ICO), global coffee exports in the past 12 months reached 129.56 million bags, of which Arabica coffee reached 83.84 million bags, an increase of 9 , 54% and Robusta coffee reached 45.72 million bags, an increase of 2.93% compared to exports 12 months earlier.
However, in early November 2019, Arabica coffee prices began to recover when the market received forecasts of Brazil's crop production reduction adjustment in 2019 and the global coffee surplus forecast to be deficient. missing about 3.6 million bags. The momentum of recovery was even stronger as many traders judged that due to the lack of rain in growing areas, the quality of Brazil's coffee beans dropped, boosting the interest of the market. The ICO also forecasts that global coffee production in the 2019/2020 season will decrease by 0.9% to 167.4 million bags, of which Arabica coffee will decrease by 2.7% to 95.68 million bags and coffee. Robusta increased by 1.5% to reach 71.72 million bags compared to the previous crop. These figures also more or less reveal current price trends on the world's two futures coffee floors.
Vietnam is at the end of the Robusta coffee harvest this year with an estimated production of over 30 million bags, not much changed from the previous year's crop. It is expected that the source of goods from farmers will increase sharply due to the demand for cash to collect, pay debts at the end of the calendar year and to spend on Christmas and New Year 2020.
The latest Traders' Commitment Report (CFTC) from the Arabica coffee market in New York shows that non-trade speculators have reduced their short-term net selling position by 59.7% in the trading week as of Tuesday, November 26 to register to sell at 7,592 lots. This short-term net selling position is equal to 2,152,298 bags and is likely to have declined further after the overall positive trade period since then.
The latest CFTC report from the Robusta coffee market in London showed that, up to the same period of the report, the non-commercial speculative department reduced the short-term net selling position by 25.64% compared to the trade week. Previously, it registered to sell net at 16,998 lots, equivalent to 2,833,000 bags and is likely to change insignificantly after the trading period of slight fluctuations since then.
As of Monday 2/12, Robusta coffee stocks are certified and tracked London floor has decreased by 2,660 tons, an decrease of 1.71% compared to the previous trading week, to register at 153,020 tons. (equivalent to 2,550,333 bags, 60 kg bags).