Data from the Mercantile Exchange Of VietNam (MXV) shows that at the close of trading on April 10, buying pressure regained dominance in the global raw materials market, supporting the MXV-Index's turnaround after two days of slight declines. The index increased by 0.31% to 2,316 points, reaching its highest level in nearly 7 months. The total trading value on the exchange also rose by 9% compared to the previous day, reaching over 8,100 billion VND, the highest in more than a week.

Oil Prices Reverse Direction Sharply Due to Escalating Geopolitical Tensions

Oil prices experienced continuous volatility on April 10, influenced by various factors related to supply and demand, macroeconomic conditions, and geopolitical tensions. Despite pressure for more than half of the session, escalating tensions in the Middle East unexpectedly drove oil prices sharply higher towards the end of the trading day. By the close, WTI oil prices increased by 1.28% to $86.32 per barrel, while Brent crude rose by 1.19% to $90.48 per barrel.

After fluctuating in the morning session, oil prices faced significant pressure in the afternoon due to macroeconomic concerns and US inventory reports. The market's focus shifted to the latest US inflation data, which showed signs of rising again. Specifically, data from the US Bureau of Labor Statistics revealed that the Consumer Price Index (CPI) for March increased by 0.3 percentage points from February, reaching 3.5% year-over-year, surpassing the expected increase of 3.4%. This was primarily due to higher gasoline and housing costs, reducing expectations for a Federal Reserve rate cut in June and causing the Dollar Index to surge over 1% to a five-month high, putting pressure on oil prices.

Additionally, the weekly fuel status report from the US Energy Information Administration (EIA) indicated increases in inventories of oil, gasoline, and distillate fuels for the week ending April 5, adding further pressure on prices.

However, within just one hour towards the end of the session, oil prices recovered their losses and surged again following reports that three sons of a Hamas leader were killed in an Israeli airstrike in Gaza. This raised concerns that ceasefire negotiations could be stalled.

Moreover, potential conflict risks involving Iran, a major OPEC oil producer, also boosted oil buying sentiment. Iran has even threatened to close the Strait of Hormuz if necessary, due to Israel’s presence in the UAE. About one-fifth of global oil consumption passes through this strait daily.

Domestic Coffee Prices Surpass 105,000 VND/kg

The industrial raw materials market showed mixed performance yesterday. Coffee and cocoa continued to see strong buying interest, while cotton, sugar, and rubber prices weakened. At the close, Robusta coffee prices rebounded sharply by 1.13% after a four-day decline, while Arabica prices increased by 0.5%, maintaining at a one-and-a-half-year high. Both coffee types continued to see strong buying interest due to supply concerns, despite positive export activity in March from the top two producing countries, Brazil and Vietnam.

Extended dry conditions are worsening the situation of immature coffee cherries drying out in Vietnam’s main coffee-growing regions, raising concerns about a further decline in the new harvest's production from the already low levels this season. However, according to data from the General Department of Customs of Vietnam, in March, the country exported 188,997.2 tons of coffee, a 17.7% increase compared to the same period in 2023.

In March, Brazil exported 846,700 bags of Robusta coffee, eight times the amount from the same period in 2023. Brazil is reportedly ramping up Robusta exports to compensate for shortages from Asian countries.

The strengthening US dollar following the CPI data is one of the key factors limiting the recovery of Arabica coffee prices. The rising Dollar Index led to a higher USD/BRL exchange rate by 1.31% compared to the reference. The larger exchange rate difference created expectations that Brazilian farmers would sell more coffee, stimulating selling pressure in the early part of the evening session.

Brazil continues to increase its coffee exports for the 2023-2024 season, reinforcing market supply. In March, Brazil exported 4.29 million bags of coffee, a 37.8% increase compared to the same period last year.

On the domestic market, as of the morning of April 10, coffee prices in the Central Highlands and southern provinces rose sharply by 800–900 VND/kg, with domestic coffee prices continuing to set new historical highs, ranging from 105,000 to 105,900 VND/kg.

Source: MXV