According to the Mercantile Exchange of Vietnam (MXV), the global commodity market had mixed movements in yesterday's trading session (October 24). The MXV-Index closed slightly down 0.06% at 2,182 points. Notably, 7 out of 9 industrial raw materials, including coffee, closed in the red. Meanwhile, the metals market showed mixed results with minor fluctuations.

Favorable Weather in Brazil Drives Coffee Prices Down

By the end of yesterday’s session, red dominated the price board of industrial raw materials. Arabica coffee prices dropped by 2.73% compared to the previous reference price, and Robusta coffee prices fell by 2.39% to $4,337 per ton, the lowest level in over two months. The main reasons for this drop were the increased currency exchange rate differential and improving crop conditions in Brazil.

Despite the Dollar Index decreasing by 0.36% in the last session, the Brazilian Real depreciated even further, causing the USD/BRL exchange rate to rise (during the trading time for coffee). This situation raised concerns that Brazilian farmers would accelerate sales to gain more foreign currency, exerting downward pressure on prices.

According to Somar Meteorologia, rainfall in Minas Gerais, Brazil’s largest coffee-producing state, reached 36.8 mm last week, 15% higher than the historical average. This improved crop conditions and raised expectations for higher productivity in the 2025-2026 season.

Domestic Market: As of the morning of October 25, coffee prices in the Central Highlands and Southeast regions of Vietnam ranged between 108,400 and 108,700 VND/kg. Compared to the same period last year, coffee prices have nearly doubled from 60,200-61,000 VND/kg. Since the beginning of the year, coffee prices have increased by over 40,000 VND/kg from 67,500-68,400 VND/kg.

Other Notable Developments in Industrial Raw Materials: Cocoa prices continued to lead the decline in industrial raw materials, losing 3.5% in yesterday’s session. The main reason for this decline was the improved outlook for crop production and exports from Côte d'Ivoire, the world's largest cocoa producer and exporter.

Specifically, the Coffee and Cocoa Council (CCC) raised the estimated cocoa production for the 2024-2025 season in Côte d'Ivoire to 2.1-2.2 million tons, up 10% compared to the previous season due to favorable weather. Additionally, exporter estimates show that 193,000 tons of cocoa arrived at ports in the first 20 days of the 2024-2025 season, a 13.5% increase from the same period last year.

Cotton Market: Cotton prices also fell by 0.63% due to a surge in U.S. cotton export data. From the export report for the week of October 11-17, U.S. cotton sales reached 169,700 bales, up 6% from the previous week and 57% higher than the four-week average. Export shipments reached 98,400 bales, an increase of 70% from the previous week and 16% above the four-week average.

Metals Market: The metals market showed mixed movements at the end of yesterday’s session, with all products recording minor changes of less than 0.1% compared to reference levels.

Precious Metals: Silver prices edged down 0.13% to $33.79/ounce, while platinum prices rebounded by 0.38% to $1,033.6/ounce. The mixed fundamental data caused a clear divergence in precious metal prices.

On one hand, concerns over uncertainties related to the upcoming U.S. presidential election and ongoing conflicts in the Middle East continued to drive investors to hold precious metals as a risk-hedging tool, supporting prices. On the other hand, as the U.S. economy continues to receive more positive signals, the safe-haven appeal of precious metals is waning as investors shift funds to other riskier channels like the U.S. stock market.

U.S. Labor Data: The U.S. Department of Labor reported that initial jobless claims fell to 227,000 in the past week. Meanwhile, a preliminary report from S&P Global indicated that U.S. business activity improved in October, with the manufacturing PMI and services PMI reaching 47.8 and 55.3, respectively—both figures exceeded expectations and the previous month's data.

Base Metals: Base metals experienced a narrow trading range. The most notable movement was LME zinc, which rose 0.97% to $3,174.5/ton, the highest level in 20 months.

Zinc prices have surged recently due to supply disruption concerns. According to Bloomberg, leading zinc producer Teck Resources reduced its production target following a fire at its metallurgical plant in Canada. Specifically, Teck indicated that its refined zinc output could fall by up to 12% from previous projections, equivalent to about 40,000 tons. Although a 40,000-ton reduction may not significantly impact the global supply of around 14 million tons, it comes at a time when there are heightened supply disruption concerns.

Source: MXV