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Arabica coffee futures reach 3-month high on lower crop expectations in Brazil

Intercontinental Exchange Ice Futures Arabica

MILAN – Arabica coffee futures in New York surged to a 3-month high of 126.15 cents per lb on Monday, up 455 points for the day, following a new report from Rabobank saying that dry conditions will cut Brazil 2021/22 coffee production down to 37.2 million bags from 38.8 million in the previous off-cycle year. Coffee prices were also supported by USDA’s Foreign Agriculture Service (FAS) biannual report that cut the official estimate for global 2020/21 coffee production to 175.5 million bags from a June estimate of 176.1 million bags.

Robusta coffee futures in London rose to 1-week high of US$1,349, up US$14. The General Department of Vietnam Customs have reported that Vietnam’s coffee exports for the month of November are down by 8.4% from the previous month, to total 1,395,500 bags.

This is higher than the 1.16 million bags that had been initially forecast for the month’s coffee exports.

The report also states that Vietnam coffee exports for the first eleven months of 2020 were 3% lower on year at a total of 23,766,667 bags. Export revenue fell 1.9% to around 2.49 billion US Dollars

Farms in Colombia are struggling with labor shortages this year as low coffee prices have not provided funds to hire coffee pickers and the job has become riskier due to the coronavirus pandemic, according to a report.

Some of the larger farms have also expanded their dormitories or added tents so that their workers are more spaced out, with their bunk beds now placed two metres apart.

Workers do not always practice social distancing or wear facemasks during their breaks. But the measures have not attracted as many workers as farmers had hoped for, even though the unemployment rate in Colombia is about 50% higher than it was a year ago.

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