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MILAN – Coffee futures markets saw a strong speculative rebound in the last session of the week. In New York, the contract for September delivery increased by 1,155 points (3.9%) on Friday 8 August, closing at 309.35 cents — the highest level for the main contract since late June. Over the week, the New York benchmark price increased by 8.8%.
Similar gains were seen in London, where the most traded contract for November delivery rose by 3.9% to settle at a one-month high of $3,510 posting a weekly gain of 7.7%.
The markets remain in a state of high uncertainty, exacerbated by US trade policies. The performance of Ice Arabica on Friday’s session was also affected by the low level of certified stocks (at their lowest levels in 14 months) and the strength of the Brazilian currency, at a one-month high.
Further fuelling the situation was data released last Wednesday by Brazil’s trade minister showing a 20.4% drop in green coffee exports in July.
Still on the issue of the 50% tariffs on imports from Brazil, the U.S. industry, led by the National Coffee Association, continues to put strong pressure on the government in Washington to include coffee in the list of exempt products.
The resulting atmosphere of great uncertainty contributes to heightened volatility and discourages the conclusion of new contracts in the physical market.
The harvest in Brazil is now nearing completion. According to Safras & Mercado, the harvesting was 94% complete as of Aug. 6, an advance of 4 percentage points over the previous week.
This exceeds both last year’s figure (92%) and the historical average for the past five years (89%).
The Robusta harvest is now complete and appears to be in line with the good initial expectations. The Arabica harvest is 91% complete, with yields, at this late stage, that many producers describe as disappointing.
Safras & Mercado itself estimates that Brazilian producers had marketed only 31% of this year’s crop by early July, which is below the historical average. Analysts say that producers are well capitalised and not in a hurry to sell, believing that prices may rebound.
