According to data from the Vietnam Commodity Exchange (MXV), global raw commodity markets ended the week of January 8-12 with mixed and volatile movements. Agricultural commodities saw widespread declines, while many industrial raw materials and energy prices rose. The MXV Index dropped 0.52% to 2,107 points. Investment flow also fluctuated significantly, with average daily trading values around VND 5,200 billion, up 20% from the previous week.

Robusta Coffee Prices Reach 28-Year High

The MXV reports that during the trading week of January 8-14, industrial raw material prices were predominantly in the green, with Robusta coffee leading with a 5.15% increase, maintaining its highest level in 28 years. The main factor supporting prices was concerns over supply shortages due to escalating tensions in the Red Sea, involving the UK and the US, which heightened fears of disruptions in coffee transport.

Analyst Natália Gandolphi highlighted that shipping costs on the Pacific route had increased by 56%. Additionally, it is estimated that about 36% of coffee shipments from Asian countries like Vietnam and Indonesia will decrease in Q1 2024. This has further raised concerns about Robusta supply shortages, exacerbated by reports of Vietnamese farmers holding back on selling coffee.

However, Vietnam's customs data indicated a significant increase in coffee exports in December, up 74% from the previous month and 5.4% from December 2022. This was better than earlier estimates.

Conversely, Arabica was the only commodity in the industrial raw materials group to experience a decline, with a 1.53% drop. Improving supply levels put pressure on prices, contrary to the trend in other commodities.

Arabica inventories on ICE-US rose by 8,302 bags of 60 kg, bringing the total to 261,446 bags, moving away from a 24-year low. Additionally, Brazil and other countries are expected to increase coffee exports as Asian countries face transport issues. Brazil reported exporting 4.06 million bags of coffee in December, a 33% increase from the previous year, while Honduras also saw a 30% increase in Arabica exports.

Soybean Prices Decline for Fourth Consecutive Week

Soybean prices for the March contract ended the week with a more than 2% decrease, marking the fourth consecutive week of decline. The pressure came from increased supply forecasts from major producing countries. Notably, the USDA’s World Agricultural Supply and Demand Estimates (WASDE) report confirmed higher U.S. soybean supplies, reinforcing selling pressure.

The Rosario Grains Exchange (BCR) raised its forecast for Argentina's soybean production to 52 million tons for the 2023/24 season, up 2 million tons from earlier estimates, due to favorable weather since November. The weather forecast also predicts moderate rainfall and mild temperatures in Argentina’s key agricultural areas in January.

The WASDE report highlighted a notable increase in U.S. ending stocks for the 2023/24 season, projected at 280 million bushels, up from 245 million bushels in December and above market expectations. This increase in stocks was driven by higher U.S. soybean yield estimates, reaching 50.6 bushels per acre, which also pushed production higher.

Soybean meal and soybean oil prices moved in opposite directions last week. Soybean meal prices for the March contract fell nearly 2%, marking the eighth consecutive week of declines, although technical buying partially offset the drop. Conversely, soybean oil prices for March rose nearly 2%, ending a three-week decline, supported by higher palm oil and crude oil prices.

Domestic Market Update

On January 12, the price of imported South American corn at Vietnamese ports saw a slight increase. At Cai Lan port, the price for South American corn ranged from VND 6,550 to 6,700 per kg, with second-quarter delivery prices between VND 6,650 and 6,700 per kg. Prices at Vung Tau port were about VND 50 lower per kg compared to Cai Lan.

Source: MXV