Friday 16 May 2025

Coffee futures prices post new heavy losses on stock markets meltdown, risk-off sentiment

On the day that oil prices hit their lowest level since 2021, the Ice Arabica May contract lost 2,090 points (-5.7%) to close at 344.80 cents, its lowest level in more than two months. In London, the Ice Robusta contract for July delivery lost $328 (-6.4%) to settle at $4,800, a four-month low

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MILAN – The financial markets in deep red send coffee prices plummeting even more. Yesterday, Monday 7 April 2025, was another day of panic selling on the world’s main stock markets, with European exchanges burning a further 683 billion, while Wall Street swung wildly, partly because of the news, later denied by the White House, of a possible 90-day moratorium on US tariffs.

On the day that oil prices hit their lowest level since 2021, the Ice Arabica May contract lost 2,090 points (-5.7%) to close at 344.80 cents, its lowest level in more than two months.

In London, the Ice Robusta contract for July delivery lost $328 (-6.4%) to settle at $4,800, a four-month low. The fall in the Brazilian real, to a two-month low against the dollar, also contributed to the declines in coffee prices.

As Escritório Carvalhaes writes in its new report, ‘We are at the beginning of a period of profound changes in world trade rules and it is impossible at this stage to predict how these changes will affect the coffee market.

The scenario is extremely uncertain and it will be necessary to await developments in the negotiations and the details of the measures announced by the Trump’s Administration to understand what will happen next.

Meanwhile, the month of March saw a partial retreat in prices from the all-time highs seen in February. In fact, the monthly average of the ICO composite indicator price fell by 1.8% to 347.85 cents.

Brazilian Naturals and Robustas both fell by 2.1% to 392.48 and 257.61 cents respectively. Colombian Milds and Other Milds lost 1.4% and 1.3% to 404.97 and 404.02 cents, with the differential narrowing to 0.95 US cents/lb.

The monthly averages of the New York and London indicators (average of the second and third positions) fell by 1.4% and 2.3% respectively to 382.75 and 247.63 cents.

Figures released by the National Federation of Coffee Growers (FNC) confirm the great dynamism of the Colombian sector. Colombia, the world’s largest producer and exporter of high quality washed coffee, collected a record 14.993 million bags (+31%) in the last 12 months.

This is the highest volume in the last 20 years. In the first quarter of 2025, production reached 3.78 million, up 36%.

Exports in the first three months of the year rose to 3.6 million, a 21% increase from the equivalent period of 2024 and the best result in the last five years.

With these figures, Colombia confirms its position as one of the world’s leading coffee producers, not only in terms of volume, but also in terms of quality and resilience to adverse conditions, writes the FNC in a note, although it warns that recent rains could affect the harvest in the last quarter of the year.

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