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MILAN – Coffee futures prices rallied again in the last session of the week. On Friday 12 September, New York recorded another strong rebound after a sluggish day on Thursday, approaching the $4 per pound mark. The contract for December delivery gained 1,075 points (+2.8%) to end the day at 396.85 cents, the highest closing price for the main contract since the end of April.
There were also strong gains in London, where the ICE Robusta contract for November rose to $4,601, up 1.8% and at its highest level in the last week and a half. The recovery in coffee futures prices was helped by the revaluation of the Brazilian real, which reached its highest level against the dollar in 15 months.
Analysts continue to highlight the precarious state of the market, with very low overall stock levels, fuelling speculative movements.
Contradictory weather reports continue to emerge. On Thursday, Climatempo issued a bulletin predicting an intensification of rainfall starting this week.
However, data from other sources are raising the alarm about a worrying situation in the Arabica belt, where dry weather may affect the potential of the new harvest, which will begin flowering between late September and early October, when the spring rains arrive.
No duty exemption for Brazilian green coffee. Yet a new executive order issued by the US administration last week had raised some hopes.
In fact, Donald Trump has enacted an executive order that includes exemptions for imports including cocoa and coffee from existing US tariffs.
Effective from Monday 8 September, the order changes the tariffs for “aligned partners” that have established trade agreements with the US and recognises that certain goods cannot be sufficiently produced or sourced domestically.
The order designates specific categories for zero-tariff treatment, focusing on items that “cannot be grown, mined, or naturally produced” in the US or are unavailable in adequate quantities to satisfy domestic demand.
Included in the exemptions are a variety of fruits including bananas, avocados, mangoes, papayas and kiwis.
Other examples of exempted food and drinks are coffee products, tea (including green and black) and spices.
According to the executive order, exemptions will be contingent on factors such as “the scope and economic value” of a trading partner’s commitments to the US under reciprocal trade agreements and the “national interests” of the country.
“The decree is aimed at nations that are friends and allies of the United States. Unfortunately, however, Brazil’s relationship with the United States is currently very poor, and we have almost no dialogue with the American government. At the moment, our country is no longer considered a friend by the United States,” said market analyst and director of Pharos Consultoria, Haroldo Bonfá, adding that the 50% tariffs imposed on Brazil are based on political rather than commercial considerations and that for this reason they will most likely remain in force.
