Coffee price today December 5, 2024: Sharp decrease due to profit-taking activities on the exchange
Today's domestic coffee price, December 5, is at 107,000 - 108,500 VND/kg. It continues to decrease sharply from 3,500 to 4,000 VND/kg. This week's decrease in coffee prices is believed to be the result of profit-taking activities by investors on the trading floor.
Domestic coffee prices today
Specifically, today's coffee price in Dak Lak decreased by 4,000 VND/kg compared to yesterday, reaching 108,000 VND/kg.
Coffee price today in Lam Dong also decreased by 4,000 VND/kg compared to yesterday, reaching 107,000 VND/kg.
Similarly, today's coffee price in Gia Lai decreased by 4,000 VND/kg compared to yesterday, reaching 108,000 VND/kg.
Coffee prices today in Dak Nong are still at the highest level, down 3,500 VND/kg compared to yesterday, reaching 108,500 VND/kg.
Coffee prices fell this week, believed to be the result of profit-taking by investors on the coffee futures exchange.
Speaking at the Asia International Coffee Conference on December 3, Mr. Thai Nhu Hiep, Chairman of the Board of Directors and Director of Vinh Hiep Company Limited, said that the coffee market will continue to fluctuate. According to him, speculators are in the "smashing - releasing" phase to withdraw from the market after a long period of earning large profits.
He predicts that as the financial world withdraws from the coffee futures exchange, coffee prices will return to a more stable state.
Mr. Hiep emphasized that Vietnamese export enterprises have quickly identified this abnormality and do not follow short-term trends.
He said that the recent increase in coffee prices does not reflect the actual market situation, because supply is not so scarce that it pushes prices up like that.
The main reason comes from financial speculation, with prices being pushed up and then profits being taken. He also pointed out that exchange trading prices are often much higher than physical trading prices.
From the perspective of Mr. Do Ha Nam, Chairman of the Board of Directors and General Director of Intimex Group Corporation, there are not many real transactions in the real market, and price fluctuations are largely influenced by financial speculators.
Mr. Nam noted that the 10-year rule, where the coffee market often creates new peaks and troughs, is being broken by the strong participation of financial investors.
This can cause price cycles to be longer or shorter than traditional patterns, posing many challenges for businesses in the industry.
World coffee prices today
At the end of the most recent trading session, the price of Robusta coffee in London for November 2024 delivery increased by 50 USD/ton compared to yesterday, at 4,676 USD/ton, and for January 2025 delivery increased by 53 USD/ton compared to yesterday, at 4,657 USD/ton.
Arabica coffee price for December 2024 delivery increased by 7.30 cents/lb compared to yesterday, at 302.80 cents/lb, and for March 2025 delivery increased by 6.80 cents/lb compared to yesterday, at 300.45 cents/lb.
The sharp fluctuations on the exchange not only affect the physical market but also put exporting companies in a difficult situation.
With the “sell first, buy later” business model, many businesses risk having to buy coffee at a high price but sell it at a lower price, putting great pressure on profits.
Margin requirements in November alone were estimated to be as high as $7 billion, putting many businesses in a difficult position. Judy Ganes, president of J. Ganes Consulting, said the high margin requirements are creating heavy financial pressure, especially for companies that simultaneously manage both coffee and cocoa contracts.
