(HSV VIETNAM GROUP) - Closing the trading session yesterday (January 22), except for crude palm oil and cotton, the prices of the remaining items in the industrial raw material group all increased.
In particular, the prices of two coffee products simultaneously increased sharply thanks to the dual support of both macroeconomic and supply-demand factors.
Closing, Arabica coffee prices increased about 4.3% to 341.85 cents/pound (7,536 USD/ton). Robusta coffee prices also continued their upward momentum for the fourth consecutive session, increasing nearly 4% to 5,452 USD/ton, the highest level in nearly two months.
Regarding macro factors, the strong weakening of the USD/BRL exchange rate had an indirect impact on coffee export activities in Brazil, and at the same time pulled coffee purchasing power up sharply yesterday. The strengthening of the Brazilian Real caused the USD/BRL index to fall 1.34% to 5.94 points - the lowest level in nearly two months, and also marking the largest daily decrease of this index since mid-December last year. The narrowing exchange rate may cause farmers in Brazil to limit coffee sales due to earning less foreign currency, thereby reducing the amount of coffee exported to the world and contributing to supporting the sharp increase in prices yesterday.
Regarding supply-demand factors, coffee prices continue to benefit in the context of a less positive supply outlook in Brazil, the world's largest coffee producing country.
Somar Meteorological Agency recently said that rainfall in Minas Gerais - the largest Arabica coffee producing state in Brazil, reached 29.6mm last week, equivalent to 53% of the historical average rainfall. Lack of rain raises concerns about the situation of the crop and coffee output in this country.
Previously, the Brazilian government's Crop Supply Agency (CONAB) also lowered its forecast for Brazil's total coffee harvest in 2024 to 54.22 million 60kg bags. This number is equivalent to a decrease of 1.05% compared to the previous report and 1.6% lower than in 2023. The main cause of this weakness comes from concerns about the weather in main production regions.
Of which, Arabica coffee output reached 39.6 million 60kg bags, a slight increase compared to 39.59 million bags in the September 2024 report and 1.8% higher than the previous year. Robusta coffee output reached 14.62 million bags, 4% higher than the previous report but down nearly 10% compared to 2023.
According to the Vietnam Commodity Exchange (MXV), the world raw material market was divided in yesterday's trading session (January 22). Closing, the MXV-Index inched up slightly above 2,313 points, extending its streak of increases to 4 consecutive sessions.
In the industrial raw materials market, the prices of two coffee products continued to be "hot" when they simultaneously increased by 4%. Robusta coffee alone has increased for 4 consecutive sessions, reaching its highest level in nearly two months.
Ha Diem HSV