Arabica coffee prices dipped amidst concerns over Brazil’s weather impacting crop yield, while still on track for a weekly gain of 2.4%. Global coffee traders reduced their purchases following price surges, with Robusta coffee prices also declining slightly. Conversely, New York cocoa prices increased, while sugar futures experienced modest gains.
Arabica coffee futures experienced a decline on Friday, though they are positioned for a weekly gain. The primary concern for the market centers around the crop forecast in Brazil, the world’s leading producer of Arabica coffee. As of 1212 GMT, the price for Arabica coffee dropped by 1.3% to $3.82 per pound, while the market overall indicates a weekly increase of 2.4%.
The weather in Brazil poses continued challenges, with dry conditions impacting crop outcomes. Although some rainfall is anticipated, it remains uncertain how beneficial it will be for the crops. Maxar, a weather service, noted that “unfavorable soil moisture and mostly dry conditions will not support cherry growth,” predicting Brazil to remain relatively dry over the next five days.
The current situation has led global coffee traders and roasters to significantly reduce their purchases, minimizing acquisition levels due to the considerable price increase that suppliers struggle to have retail stores accept. Additionally, Robusta coffee prices also witnessed a slight decrease, falling by 0.2% to $5,417 per metric ton.
In related commodities, New York cocoa cotton prices increased by 1.8% to $8,334 per ton, despite being on course for a weekly decline of 8.7%. The International Cocoa Organization recently forecasted a global surplus of 142,000 tons for the 2024/25 season, prompting defensive market behavior.
While cocoa prices reflect a modest uptick, analysts from BMI have cautioned that tight stock levels could keep prices elevated despite the improved production outlook. London cocoa futures also rose by 0.8%, reaching 6,496 pounds per ton.
On the sugar front, raw sugar futures increased by 0.8% to 18.28 cents per pound, alongside a 0.5% rise in white sugar prices, which reached $519.50 per ton.
In summary, Arabica coffee prices show a moderate decline while remaining poised for weekly gains amid concerns over Brazil’s dry weather conditions impacting crop development. The broader coffee market reveals reduced purchasing activity due to previous price surges. In contrast, cocoa and sugar prices have shown slight increases, reflecting varying market dynamics. Overall, weather conditions and production forecasts will continue to play critical roles in commodity pricing.
Original Source: www.tradingview.com
