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Coffee prices lost milestones

Coffee prices plummeted, the local market took landmark 40 million / ton, down deep tenor floor below the psychological $ 2,000 / ton. In terms of business, who are not sold in the first two months of service as an opportunity lost.

Coffee prices missed opportunity

Coffee is harvested at the peak. The leader of a unit of exports is estimated to harvest this pace throughout the Highlands, coffee basket of the country, reaching approximately 65%.

Chart 1: Evolution robusta futures prices closed European Ice (author-date)

Two Typhoon No. 4 and No. 5 in a row last but not directly affect the coffee, but rain can slow a pair every day. In some places, rain storms affected by Verified by following the early flowering, flowering phase is "wasted" not born fruit later. Many gardeners report this reduced output, so psychologically lost season for the 2015/16 crop year to the larger, more intent pins goods surged.

On the other hand, on the sidelines of a conference of the Association of Coffee & Cocoa last week in the city, some exporters confess that from the beginning of the new season 2014/15 they have not sold much in fear of sudden price increase to hear information from the crop which reported. On the other hand, this year more banks extended loans to farmers to sell off sharply from the beginning of the season to avoid putting pressure on the market as prices fall.

Yet the price of coffee in the Central Highlands province on December fell steadily from the beginning until now. In the Central Highlands, the price of raw coffee yesterday really takes 12-12 landmark 40 million / ton to only around 39.5 million / ton. Although still trust prices, many people still do not regret having missed out opportunities to crop prices in two months ago firmly on the 40-42 million / ton.

Regrets the high price first season when prices are still hovering down, many people are relying lenders to sell off the current low price. "This year the bank loans with higher norms. Specifically, over two hundred million hectares of coffee a mortgage. This helps people with conditions to keep the coffee, "a garden borrow money triumphantly announced an information network on the coffee market.

Coffee futures prices are not in accordance with supply and demand

As a habit ready to start participating in the world coffee market, many exporters and farmers believe our country is on the floor trading price reflects term supply and demand of the world coffee market absolutely. In fact, in many countries produce and export other bulk materials, few would note that it is only as a reference channel.

Indeed, in recent years, despite heavy harvests information from the two countries produce and export large, worth the price of the futures to rise, the price of coffee on the second floor has dropped continuously. The influence of economic factors-especially political and currency war between the superpowers now have commodity price swings up and down, falling prices make it difficult for water supply.

The US dollar rose, an indication the US economy recovers, did wave of investment in the stock market soared. If ago, when the stock market hardships, investment funds have moved their capital to "hide" in the commodity futures market, it now looks like they are withdrawing capital from the cargo floor to floor securities. About trading on financial markets, said that there are two investment funds in commodity price index showed nearly US $ 6 billion out of the cargo floor, from 171.1 billion to 165.3 billion times over time.

Therefore, not only coffee, many other commodities futures trading floor are the same fate devaluation divestment movement in general. The damage is none other producer countries and so rely on exports of raw materials.

Coffee, robusta futures floor last week European Ice closure at the deepest level decreased since the beginning of the season so far. Session 11-12, robusta futures prices fell to US $ 1,965 / ton, lost US $ 233 / tonne compared with the peak of $ 2189 / ton up dated 13-10-2014. 12-12 weekend session closing price of robusta floor pegged at $ 1974 / ton (see chart 1). Ice arabica futures prices not much better in New York, release this weekend only 174 cents / pound (cts / lb) compared to 11-10 days is 225.75 cts / lb, equivalent loss of 81.74 cts / lb or 1,800 dollars / ton.

Inventories increased coffee standards

Chart 2: Inventory standards robusta floor Ice ascending Europe (source: Newedge)

Inventory standards (certs) Robusta floor of the European Ice 8-12 days to end up at 124 640 tonnes, an increase of 6,800 tonnes compared to the last report two weeks ago, the value of time today 13-12 approximately 246 million US dollars. Inventory New York arabica standard floor is at 139 381 tonnes with an estimated present value of US $ 535 million. Thus, the use of private capital for real inventory of both floors of coffee so far reached 781 million US dollars.

Data Inventory coffee standards affecting certain transactions to the direction of the floor price of coffee futures world.

Source Saigontimes