MILAN – Coffee futures prices tumbled to new historic lows on Tuesday pressured by broader equity market weakness, a softer Brazilian real and lingering oversupply concerns. Brazilian real dropped to a 1-week low against the dollar Tuesday, which encourages export selling by Brazil’s coffee producers. In less than 20 days, the Colombian peso has fallen 6.6% against the US dollar.
In New York, the benchmark contract for July delivery settled 215 points down to a new 14-year low of 88 cents. In London, Robusta futures dropped almost 4% on aggressive speculative selling to nine-year lows. The contract for July delivery closed at US$1,295, a level last seen in April 2010.
The International Coffee Organization (ICO) raised its global 2018/19 coffee surplus estimate to 3.7 mln bags from a prior estimate of 3.1 mln bags.
A further bearish factor pressuring coffee prices was Monday’s forecast by INTL FCStone for Brazil’s 2019 coffee harvest to fall to 53 mln bags from 61.7 mln bags in 2018, which is above the forecast from Conab, Brazil’s government’s crop forecasting agency, of 52.5 mln bags.
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