CIMBALI
Friday 07 February 2025
  • La Cimbali

Arabica coffee futures markets soared to new historic highs last week on tight supplies and lower production estimates from Brazil

On the Robusta side, market developments reflected lower trade flows from Vietnam during the week of the Lunar New Year celebrations. On the Arabica front, prices have been affected in recent weeks by new negative crop estimates from Brazil. Brazil’s national Supply Company (CONAB) will release its first (preliminary) estimate for the 2025/26 crop tomorrow, Tuesday 28 January 2025

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MILAN – It was a week of steady gains in the coffee futures markets, with Arabica prices hitting new all-time highs and Robusta quotes soaring to a six-week high. The ICE Arabica closed Friday, 24 January at 347.55 cents, having reached a new all-time high intraday of 349.80 cents. In four sessions (New York was closed on Monday for Martin Luther King’s Day), all of which in positive territory, the main contract for March delivery posted a 5.8% gain over the previous Friday.

With a streak of six consecutive sessions in the black, London, on the other hand, gained 10.7% over the week ending Friday at $5,544, not far from the contract highs recorded in late November.

On the Robusta side, market developments reflected lower trade flows from Vietnam during the week of the Lunar New Year celebrations.

On the Arabica front, prices have been affected in recent weeks by new negative crop estimates from Brazil.

Last month, Volcafe specialists cut their 2025/26 forecast for Arabicas to 34.4 million bags, down by about 11 million bags from the September estimate, after a tour in the main production areas during which they witnessed the severity of the damage caused by months of drought.

Last week, Brazil’s national Supply Company (CONAB) further reduced its official estimate for the 2024/25 crop. CONAB will release its first (preliminary) estimate for the 2025/26 crop tomorrow, Tuesday 28 January 2025.

Meanwhile, Safras & Mercado reports in its regular weekly survey, updated on 21st January, that Brazilian growers have so far marketed 85% of the 2024/25 crop. A figure that is well above that recorded at the same date last year (74%), as well as the five-year average for 2019-2023 (77%).

“Sales of Arabica coffee reached 82% of production, far exceeding both the same period last year (69%) and the five-year average, which is around 75%” says Safras & Mercado. “The growers’ resistance to sales has increased due to the limited supply available and the expectation of new price highs, which should set the pace of business until the arrival of the new crop.”

“Sales of canephora coffee (conillon/robusta) in Brazil, on the other hand, were faster, driven by greater demand from the domestic industry.”

The Brazilian consultancy also observes – in another note – that the development of the new Brazilian crop has reached the stage of graining (bean formation), during which regular and abundant rainfall is essential.

“A more favorable climate scenario at the beginning of this year could help alleviate pessimism surrounding the Brazilian Arabica crop. However, below-average rainfall in some regions is once again fuelling fears among growers. It is worth remembering that last year’s crop in Brazil was hampered by irregular graining, which resulted in a loss of income and negative adjustments to production projections,” concludes Safras & Mercado.

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