MILAN – More ups and downs on the coffee futures markets. On Wednesday 15th January, Ice Arabica was back above $3.30, closing at 330.45 cents, a daily gain of 850 points. However, in yesterday’s session, Thursday 16th, it lost 330 points and fell to 327.15 cents. A similar trend, but with smaller fluctuations, was seen in London, which closed at $4,912 on Wednesday, but fell back to $4,889 yesterday.
Both coffee futures markets were influenced by data published by Cecafé on Wednesday afternoon, which showed that Brazilian exports in 2024 reached an unprecedented 50.44 million bags, a 28.5% increase over 2023.
Still on the subject of Brazilian statistics, data collected by Cepea researchers reflect the upsurge in domestic prices during 2024.
Unfavourable weather conditions (heat and drought), a lower than expected harvest and production declines in other countries, starting with Vietnam, are among the factors that have contributed to pushing up the indicators.
The CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo, hit constant records of Cepea series (since November 2001).
The monthly average of this Index changed from BRL 740 per 60/kg bag ($122.274/bag, equivalent to 92 cents/pound and $2.038/tonne), in December 2023, to BRL 1,800/bag ($297.42/bag, equivalent to 224.80 cents/pound and $4.958/tonne), in December 2024.
As for Arabica, the CEPEA/ESALQ Index for the type 6, delivered to São Paulo city, hit the highest level since 1997, rising from BRL 970/bag ($160.278/bag or 121.20 cents/pound) to BRL 2,000/bag ($330.47/bag or 249.80 cents/pound).
Between the end of August and the beginning of September, the Robusta indicator surpassed that of Arabica, a circumstance that had only occurred once before, between October 2016 and January 2017.
The year that has just begun looks set to be equally challenging for the coffee markets, especially given the current global supply/demand balance.
With no prospect of a significant recovery in world production, low stock levels and still solid demand, prices will remain at very high levels.
In Brazil, a decline in Arabica production is expected, only partly offset by the expected increase in the robusta crop.
As a result, Cecafé believes it is unlikely that exports will repeat this year’s record levels in 2024, although the pace of shipments will remain high.
The Vietnamese harvest, which is coming to an end, is also expected to be below historical averages.
It must be said that the various estimates have not yet reached a real consensus on the actual size of this year’s coffee crop in Vietnam. The US Department of Agriculture recently raised its forecast for Vietnam’s 2024/25 production from 29 million bags to 30.1 million bags.
Even the influential Coffee and Cocoa Association (Vicofa), which is usually very conservative in its forecasts, has revised its estimate upwards by one million bags to 28 million.