Thursday 23 May 2024
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Coffee futures prices rally on tight supplies, stronger Real and lower exports

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

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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.

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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.

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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.

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