Market analysts are closely monitoring weather developments in Brazil and geopolitical factors that could impact coffee prices.

According to forecasts from experts, coffee prices may continue to trend upward in the short term due to supply shortages and high consumption demand. However, investors should be aware of fluctuating factors such as changes in trade policies and the global economic situation to develop appropriate investment strategies. For example, any changes in U.S. tariff policies on coffee imports from Brazil or Vietnam could significantly affect international coffee prices.

According to data from Bloomberg and Reuters, market analysts are closely watching weather conditions in Brazil and geopolitical factors that could influence coffee prices. Additionally, factors such as transportation costs and container shortages also play a crucial role in shaping current coffee prices.

Source: Internet

Coffee prices experienced a strong increase in April 2024, then cooled off at the beginning of May, but have shown a tendency to rise again.

Coffee trading on both the London (Robusta) and New York (Arabica) exchanges is increasing in futures contracts, indicating that investors are betting on higher coffee prices in the near future.

Source: Internet

Regarding supply and demand, the forecast for the 2023/2024 crop year, according to the latest USDA report released in December 2023, estimates global coffee production at 171.4 million bags, up by 6.9 million bags from the previous crop year. Meanwhile, global consumption is projected to reach a record high of 169.5 million bags. Ending stocks are expected to remain tight, at a low of 26.5 million bags, the lowest in the past 12 years.

In Vietnam, the Ministry of Agriculture and Rural Development has reported that coffee production for the 2023/24 crop year could decrease by 20% to 1.47 million tons, the lowest in four years, due to drought. Regarding coffee prices, the Ministry of Industry and Trade predicts that the global coffee price increase may slow down or even reverse in the second half of 2024, with Vietnam's export revenue projected to reach $4.5–5 billion.

In an early April report, Citi noted that coffee prices have exceeded the short-term target of $1.85 per pound and are poised for further increases to $2.10–2.20 per pound due to adverse weather and continued financial inflows, among other signals. The group forecasts that Arabica coffee futures will trade between $1.88 and $2.15 until the calendar year 2024. On the other hand, Citi may revise its price forecast upward if the supply outlook tightens further.

In summary, the coffee market is one of the most active commodity trading markets, involving various participants including producers, exporters, and investors with different objectives. To succeed in this market, investors need to combine macroeconomic analysis of factors impacting coffee prices with technical analysis of short-term price trends. A thorough understanding of the history, characteristics, and volatility of the coffee market is key to success in this field.

Source: Compiled