Coffee price keeps staying within a tapered triangle since the second half of June (ranging between 150 and 190 cents per pound). Rapid growth of supply is the major reason of this, as export of both, Arabica and Robusta, keeps growing.
Export from Vietnam may drop in October. Experts at least hope it to reduce to 60000-90000 mln. bags versus 120000 in September. This year Vietnam expects early yield, and farmers hope to start supplies of new crop at the end of October.
As mentioned before, despite the delay with coffee supply from Brazil, at this point export and stocks of Robusta are growing quicker than last year. For example, in July export from Central America, Mexico, Columbia, Peru, and Dominican Republic has risen by 49.6 percent in comparison to last year, having reached 2.9 mln of 60-kg bags in August. In general, certified stocks of new coffee crop at ICE amount to 2 121 276 bags as of 26.09.2012, which is the record point since September 2010, whereas 1330 bags have been hit by hurricane in New Orlean.
The chart above shows that coffee price during the period of 2010 – April 2011 has risen from 129 to 309 cents per pound, and from May till the present time it has dropped to 170. In other words, there is hardly where to drop further, taking into consideration the fact that its production cost is about 160. New season of 2012-2013, which started in October is expected to bring record yield with slightly rising demand. On the other hand, the expected drop of export from Vietnam at the beginning of October may result in price rise. What is more, seasonal trend may also have its impact.
In general, according to the Analytics Team of Commodity Trading Department of , flat is expected to continue in the nearest future, but news are to be closely watched (the main crop of Arabica in Columbia is supposed to be gathered at the end of autumn-beginning of winter) and ВСА (possible price rise).
