VINAGRI News - Domestic coffee prices in Vietnam fell sharply by 1,100 - 1,400 VND/kg on March 4, tracking losses in London robusta futures, which declined 1.78% to $3,705/ton. Ample global supply prospects and a weaker Brazilian real continue to pressure the market, while limited supportive factors have yet to trigger a reversal.
Summary:
> Domestic coffee prices fell 1,100 - 1,400 VND/kg to 94,300 - 95,100 VND/kg.
> London May 2026 robusta closed at $3,705/ton, down 1.78%.
> Domestic prices are trading at a discount of about $83.19/ton to London futures.
> Global supply outlook remains strong, weighing on prices.
> Short-term trend favors continued pressure or sideways movement.
Vietnam’s domestic coffee market declined sharply on the morning of March 4, following a significant drop in London robusta futures.
At the close of trading on Tuesday (March 3), robusta coffee futures for May 2026 delivery on the London exchange fell 1.78% (down $67/ton) to $3,705/ton. Other nearby contracts also posted notable losses: the March 2026 contract declined 2.13% (-$82/ton) to $3,760/ton, while the July 2026 contract fell 1.41% (-$52/ton) to $3,624/ton.
Converted into Vietnamese dong at the current exchange rate of 1 USD = 26,220 VND, the May 2026 robusta contract is equivalent to approximately 97,100 VND/kg.
In the Central Highlands, domestic coffee prices on March 4 dropped sharply by 1,100 - 1,400 VND/kg, trading within the range of 94,300 - 95,100 VND/kg. With an average price of 94,900 VND/kg, domestic robusta is currently about 2,200 VND/kg lower than the London May 2026 futures contract, equivalent to a discount of roughly $83.19 per ton.
International market outlook
The global coffee market entered the March 4 session cautiously after May 2026 robusta futures closed at $3,705/ton, down 1.78% in the previous session. The primary downward pressure stemmed from the weakening Brazilian real, which encourages Brazilian producers to accelerate exports and increases selling pressure on futures prices.
Improving global supply prospects remain the dominant market driver. Forecasts indicate a strong rebound in Brazil’s 2026 coffee crop, alongside expectations of record global production and continued growth in Vietnam’s robusta exports. These factors are reinforcing the perception of relatively abundant supply. Meanwhile, rising ICE-monitored coffee inventories have further dampened bullish momentum.
On the supportive side, reduced output in Colombia and weaker Brazilian coffee exports in the latest month are providing some underlying support. However, these elements have so far only helped to limit losses rather than reverse the prevailing trend.
Price scenarios for the March 4 session
Under current conditions, the market may evolve under three main scenarios:
𑇐 Base case (higher probability): Prices remain under pressure, potentially retreating toward the $3,660 - $3,680/ton range. If selling intensifies, the market could test the $3,600 - $3,620/ton zone.
𑇐 Sideways scenario: Technical buying may emerge after the recent sharp decline, keeping prices within a $3,700 - $3,740/ton range, with immediate resistance around $3,750/ton.
𑇐 Bullish scenario (lower probability): A recovery in the Brazilian real or fresh negative supply news could push prices back toward the $3,780 - $3,820/ton range.
Overall, the balance of fundamentals currently favors the supply side, while currency dynamics and market sentiment have yet to signal a clear reversal. In the short term, robusta prices are likely to remain in a corrective or narrowly sideways pattern until stronger catalysts emerge.
NPK/ Vinagri News
No comments:
Post a Comment