MILAN – The rally of Arabica coffee futures continues unabated. Yesterday, Wednesday, 5 March, May Ice Arabica coffee in New York gained a further 1,155 points to settle at 409.95 cents, after hitting a daily high of 418.55 cents. Insufficient rainfall in Brazil’s coffee belt continued to dictate sentiment.
Since the beginning of the week, the benchmark has appreciated by almost 37 cents! The trend was different in London, where the most traded contract for May delivery fell slightly (-$2) to close the day at $5,643.
Robusta futures were held back by forecasts of heavy rainfall in Vietnam, beneficial for the development of the new crop and useful for replenishing water reserves.
The current weather trend in Brazil is likely to have a further negative impact on the Arabica crop. However, the most recent forecasts appear somewhat more optimistic.
“Current estimates regarding the arabica harvest indicate that it will be smaller than in 2024, but not as bad as we imagined” said Lúcio Dias, analyst and consultant at Agronegócios, quoted by Notícias Agrícolas.
“We have observed an increase in the extension of cultivated areas and irrigation for Arabica crops, which could compensate for the effects of the adverse climate we had in 2024,” Dias noted.
Pine Agronegócios expects an Arabica crop of 36.42 million bags this year, due to cyclical factors, adverse weather and pruning. The Robusta crop is estimated at 23.90 million bags.
According to StoneX, thanks to the efficient use of irrigation, improved phytosanitary conditions of the crops and the continuous improvement in agricultural practices by the growers, the Robusta crop in Espírito Santo is in an excellent vegetative state.
If climatic conditions remain favourable, the 2025/26 Robusta crop could be one of the biggest in the state’s history. The Robusta harvest will begin in a few weeks.
Meanwhile, the financial situation of Brazilian traders, Atlantica and Cafebras, and their parent company, the Montesanto Tavares Group continues to deteriorate, reports Reuters. The two companies have filed for bankruptcy protection, looking to restructure a total debt of more than $368.5 million. According to a statement dated 28 February, failure by Brazilian coffee growers to comply with contracts has made the financial situation of the two companies unsustainable.
The situation has been exacerbated by further price hikes and the depreciation of Brazilian real against the dollar.
