MILAN – Coffee futures prices rallied yesterday on Brazilian Real strength and tight global supplies. In New York, the most active contract for July delivery skyrocketed to a 2-and-½-week high of 189.40 cents per lb, up 655 points (+3.58%) from last Friday. In London, the July Ice Robusta closed up $56 to $2,488 after reaching a day high of $2,506.
The Real rallied Monday to a 4-week high. A stronger Brazilian currency usually discourages export selling from Brazil’s coffee producers.
Arabica prices were also supported by a decline in ICE certified stocks, that fell to a 5-1/4 month low of 642,776 bags mostly originating from originating from Honduras (57%) and Brazil (39%).
In Brazil, harvesting operations are taking place at a slower-than-usual pace in the country’s coffee belt and the situation is made worse by labour shortage.
Coffee traders scrambling to supply roasters with Robusta beans are pinning their hopes on Brazil as prices for the bitter bean typically used to make instant coffee hit 12-year highs after exports from top producer Vietnam slid, reports Reuters.
The International Coffee Organization reported last week that global 2022/23 coffee exports during Oct-Mar fell 6.4% 62.295 million bags.
In other news, the US Department of Agriculture USDA Global Agricultural Information Network have revised their estimate for the Guatemalan coffee crop in coffee year 2022/23 down by 6.70% to now reach a total of 3.48 million bags, due to excessive rain during the flowering season.