LONDON: Arabica coffee futures on ICE hit six-month lows on Friday as concerns over supply in top producer Brazil eased, while robusta edged further away from last week’s record high.
Raw sugar, arabica coffee steady
Coffee
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September arabica coffee fell 2.9% to $1.6525 per lb at 1238 GMT, having hit its lowest since January at $1.6500.
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Global coffee production in 2023/24 (Oct-Sept) is expected to grow by 4.3 million 60-kg bags from 2022/23 to 174.3 million bags as higher output in Brazil and Vietnam offsets a fall in Indonesia, the United States Agriculture Department (USDA) said.
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Refinitiv Commodities Research said Brazil will experience above average temperatures until at least the beginning of July, meaning limited risk of frost, while dry conditions should also prevail, allowing the harvest to progress.
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Brazil’s 2023/24 coffee harvest has reached 39% of the total area by June 20, slightly below normal, consultancy Safras & Mercado found.
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September robusta coffee fell 1.8% at $2,699 per metric tonne, edging further from last week’s record high.
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Roasters in Brazil are considering shifting their blends towards more low quality arabica because of the price surge, market sources say.
Sugar
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July raw sugar ???fell 1.7% to 24.50 cents per lb.
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Speculators are liquidating some of their large long positions as the July contract’s month-end expiry looms.
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On the wider financial market, global stocks were poised to end the week lower as investors bet on interest rates remaining higher for longer to quell inflation.
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No rains are forecast in the largest sugar belt in top producer Brazil until at least July 5, meaning the harvest should progress well. * August white sugar fell 1.2% to $665.70 a tonne.
Cocoa
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September New York cocoa dipped 0.1% to $3,207 a tonne. The market last week hit a seven-year high of $3,271.
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“Near to above normal, but moderate rainfall will be favourable for Africa cocoa/coffee crops into early July,” Refinitiv Commodities Research said.
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