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Sugar Prices Increase, Red Color Covers Agricultural Product Price List

4 thg 1, 2024

According to the Mercantile Exchange Of VietNam (MXV), as of the end of the first trading day of 2024, selling pressure dominated the global raw material commodity market. The MXV-Index fell by 0.78% to 2,111 points, marking the third consecutive session of decline.


Soybean Prices Fall to Lowest Level Since June

According to MXV, at the close of the first trading session of 2024, soybean prices dropped sharply by nearly 2%, reaching their lowest level since June. Sellers dominated the market from the opening. Heavy rains in drought-affected areas of Brazil have brought a more positive outlook on supply, putting pressure on prices.


The National Meteorological Institute (Inmet) reported that Brazil would experience heavy rains and the risk of flooding in the central and northern regions during the first week of January. Inmet forecasted that heavy rains and strong winds would occur in the regions of Rondonia, Mato Grosso, Goiás, Minas Gerais, Central West Bahia, Piauí, and Maranhão. These are areas that have been experiencing below-average rainfall since the beginning of the season in Brazil. In addition to the aforementioned states, Rio Grande do Sul and Santa Catarina in southern Brazil will also receive rainfall ranging from 20mm to 40mm in the coming days. Inmet also forecasted that there would be rain in Paraná, but with a lower probability.


In the context of northern and central Brazil suffering from drought, heavy rains will replenish the moisture deficit, helping crops recover from yield losses and improving production.


Additionally, in the Export Inspections report, the U.S. Department of Agriculture (USDA) indicated that the country's soybean shipments amounted to only 962,000 tons, lower than the previous week's 1.12 million tons and the 1.48 million tons from the same period last year. Since the beginning of the 2023/24 season, the shipping rate compared to the total season's exports has only reached 43.2%, lower than the 49.14% in the same period last year. This indicates that U.S. shipping activities are facing certain difficulties due to congestion in the Panama Canal, adding pressure to the market.


Similar to soybeans, soybean meal prices also weakened in the first trading session of the new year. In Argentina, the world's largest producer of soybean meal, weather conditions in major production areas are generally favorable. Ample rainfall since the beginning of the season has helped farmers boost planting activities, supporting favorable crop growth. With a positive outlook on soybean supply, the market is expecting soybean meal production in Argentina to recover strongly next year.


In the domestic market, as recorded on December 28, the price of imported South American soybean meal at Vietnamese ports was slightly reduced. Accordingly, the offer price of South American soybean meal at Cai Lan port was adjusted to 13,600 VND/kg. For the second quarter delivery, soybean meal prices fluctuated around 13,100 - 13,400 VND/kg. At Vung Tau port, the offer price was about 150 VND lower than at Cai Lan port.


Sugar Prices Rebound from Low Levels

After falling to the lowest level in 8 months, sugar prices rebounded by 1.55% at the close of trading on January 2. Low sugar production in India, combined with below-average rainfall in Brazil, supported price increases in the first trading session of the new year.


The Indian Sugar Mills Association reported that from October 1 to December 31, the country produced 11.21 million tons of sugar, down 7.6% compared to the same period last season. Low rainfall reduced sugarcane production, leading to a decline in sugar production.


Additionally, traders are paying attention to the below-average rainfall in Brazil in the last days of 2023. This could affect sugarcane yields and future sugar production.


Coffee Prices Mixed


Arabica coffee prices rose slightly by 0.98% while Robusta coffee prices continued to decline by 1.3% compared to the reference. Concerns about supply shortages still loom over the market, preventing Arabica prices from extending their decline.


In the report ending December 29, the total certified Arabica stock at ICE-US was 251,224 bags of 60kg, down 7,175 bags from the previous session. The uncertainty about inventory recovery data has kept supply concerns in the market unresolved.


Moreover, forecasts indicate that heatwaves will continue to threaten the coffee supply outlook for Brazil's 2024/25 season. The Water and Meteorology System of Minas Gerais (Simge) reported that the average temperature in the first quarter of 2024 in Brazil's main coffee-growing region could be 2 degrees Celsius higher than usual. This slows the development of coffee plants for the 2024/25 crop. Combined with currently low inventories, Brazilian farmers fear supply shortages, which limits their selling.


In the domestic market, as recorded this morning (January 3), the price of unprocessed coffee in the Central Highlands and southern provinces fell by 300 VND/kg. Accordingly, domestic coffee is currently being purchased at around 67,300 - 68,200 VND/kg.

Source: MXV

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