Market analysis

Coffee price rises
(Saigon Times Online) - Coffee prices last week as the rolling ball on the grass of World Cup in Brazil, when high bounce, low bounce ... and at the last session increased as a beautiful goal. The more Prices busy selecting how many, the more quiet import and export activities. Buyers are finding the way to "export" the coffee into the domestic market.



Figure: Evolution closing price floor robusta futures in May (author updated)

High trading prices despite weak demand

Despite rising futures prices fell erratically in the week, close prices some days up to 1,999 dollars / ton and also the day is only U.S. $ 1,970 / ton, the price of raw coffee in the Central Highlands remained very strong. Almost as many deals which are recorded primarily on the 39 million vnd / ton, at least equal to the level of the end of last week.

Export price is canculated on the basic difference between the listing price floors and FOB terms (delivery at the port of departure) so not decrease, 2.5% black tank types are being offered by the floor price at maturity. "The local market is very tense should be sold at full price new London base hui," said Le Tien Hung, General director of the September 2 company (Simexco Dak Lak), said.

However, almost no buyers can go straight to the roasting coffee oven cause export prices in the exporting countries are higher. In Indonesia, the same type price of coffee exports are to be offered at the plus level 30-50 dollars / ton, but the buyer only paid back at minus 20-50 $ / ton compared to the list price. "I have not heard any public business sale price match this week," an exporter in Java Island, Indonesia said.

In Vietnam, some businesses buy 2.5% black tank coffee with very little amount deducted at 20-30 dollars / ton, but no sellers dared "do-dose".


Coffee export demand falls backwards

Buyers want to buy less than the listed price (excluding back), sellers prefer to sell higher than the futures price (plus) while the needs to go straight to the roasting factories are limited in this time.

General Department of Vietnam Customs estimates coffee exports of Vietnam 5-2014 month only 137 401 tonnes, down 34.8% from 210 751 tonnes in the month but rose 17.9% 4-2014 compared with the same period in 2013. Accumulation of the next 5 months reach 936 395 tonnes, an increase of 32.2% over the same period last year was 707 849 tons. Although exports fell, volumes go directly to address consumer demand as the oven roasted just over 100,000 tonnes, which is lower than the demand estimated monthly average of 125-130000 tons.


In May coffee exports nearly 35.000 VND tons 5-2014 firms have been in business for under floor storage period. This month, upto June 19th, said the restaurant floor robusta futures of Vietnam is the business put into storage in the warehouse about 8.600 tons more.

Because export prices calculated on the difference in list prices are attractive, some foreign businesses corporation (FDI) has processing plants and internal warehouse, bonded seeking to sell coffee on the market domestic market through temporary re- import, re-export.

Indeed, instead of coffee through the warehouse floor is designated Ice Liffe in Europe and North America, has just cost transportation, warehousing, cargo handling ... usually at a very high level, these companies choose to resell for customers who need even where they had purchased and stored in warehouses. Price category 2 standard term in the standard floor minus 30 $ / tonne but excluding cost shall be moved to the warehouse in Europe, is now on sale in the domestic market at minus 20 dollars / ton no cost from exporter to importer warehouse. This is a form of "interrupt" the most compact and convenient. Some Local agents said the average rate on the purchase of the company earlier this FDI minus about $ 100 / ton.

If so, FDI firms accept about 80 dollars / ton before freight charges instead of through the warehouse floor term, complicated and expensive.

Price increases minute "89"

After walking around, while rising, while lower down, two floors Liffe futures Ice Ice London and New York arabica Friday 20-6 late yesterday surged. London robusta bottom floor closed at U.S. $ 2,001 / ton, up 35 dollars / ton compared with the previous day. However, the increase in day is just enough to compensate for what was lost before, so compared to last week prices higher only 3 dollars / ton (see chart above). New York arabica Flooring unexpectedly positive flared at 6.40 cts / lb (cents / pound) or the equivalent of 141 dollars / ton, but the lower-priced end of the week last week 0.95 cts / lb or $ 20 / ton.


After a week, the London increased by only 3 dollars but raw coffee prices in the Central Highlands today offering 39.5 million / ton, an increase of 500,000 VND / ton compare with the past 7 days.

"Coffee prices last week rose almost impossible to derive from supply and demand, which stems from external factors," a market analyst in the city said. Cu "double" the geopolitical crisis in Ukraine and Iraq has weakened the U.S. dollar on the foreign exchange market last week. Looks like some cargo floor is term financial world navigation and choose to swap funds as safe havens including gold, crude oil, cocoa rise intense week. Coffee topped the "vitality" was in favor of the financial world.


On the other hand, in the week Vietnam dong depreciating against the U.S. dollar, as of yesterday, many banks raised the food co-listed on the first 21,350 dollars. European coffee prices rose 500 thousand dollars / ton last week probably derived from this element.

"Fortunately, the last trading day, the price of coffee places increased salvage what was lost," a dealer said buying coffee at Pleiku. The market as a surprise victory on the soccer field in minutes "89", the boss of an agent said.

Expert: Nguyen Quang Binh

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