Wednesday 29 June 2022

Arabica coffee futures reach a new high of 258.35 cents in another day of price hikes on the New York market

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MILAN – Arabica coffee futures rose again sharply on Wednesday in another day of wild price hikes in New York. The main contract for March delivery of the ICE Arabica gained 940 points (+3.6%) to close at a new historic high of 258.35 cents, the highest level in over a decade for the “C” Contract.

Tight supply, logistics problems and dwindling stockpiles sparked speculative buying for a second consecutive day in New York. Robusta coffee futures in London reached a 3-1/2 week high of $2.270, a $24 increase over the previous day.

ICE reported stocks held at port warehouses monitored by the exchange declined for the 15th straight day yesterday to a new 22-year low of 1,035,863 bags.

ICE Robusta certified stocks fell Monday to a 3-year low of 9,061 lots or 1.51 million bags. According to Reuters, traders are planning to deliver thousands of tonnes of robusta coffee from Asia to the ICE exchange in Europe for the first time in more than three years – a move likely to take the heat out of robusta prices.

In another sign of tight supplies, Brazil’s green-coffee shipments fell 14% in January. According to Cecafé, the world’s biggest producer of the commodity exported last month a total of 3.226 million bags, an 11.8% decrease over the same month of 2021.

Coffee export in Jul-Jan period were 19.4% down to 22.872 million bags.

The decline in the dollar index this month is affecting money flow and favoring soft commodities prices, according to Natalia Gandolphi, an analyst at HedgePoint Global Markets in Brazil.

“The narrative is still declining stocks and doubt about how many years deficit we are confronting. With COVID moving into the endemic phase and palpable demand building, it’s really hard to believe that we have seen the highs,” Cardiff Coffee Trading said in a market update.

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