MILAN – Coffee prices recovered on both markets in the last session of the week. Ice Arabica benchmark gained 320 points to close at 160.80 on Friday. In London, the main contract for September delivery inched up $15 to settle at $2540. Prices received support by a stronger real. The Brazilian currency rose to a 1-1/2 week high against the dollar.
Earlier last week, Arabica coffee fell to a 5-1/2 month low Tuesday following favourable weather reports from Brazil.
The New York market was also influenced by the latest export figures from Cecafé that showed a further decline in Arabica shipments as opposed to a surge in Robusta sales during the month of June.
Ice Arabica certified stocks fell slightly to 545.203 bags, as of July 14th.
ICE-monitored Robusta coffee inventories Wednesday fell to a record low of 5,435 lots, or 905.833 bags.
The latest Commitment of Traders report from the New York market has seen the Non-Commercial Speculative sector increase their net short position by 26.79% within the market over the week of trade leading to Tuesday 11th. July 2023 to register a new net short position of 13,342 lots.
In London, the market has seen the Speculative Managed Money Sector cut their net long position by 4.47% within the market over the week of trade leading to Tuesday 11th. July 2023: to register a new net long position of 38,810 Lots
According to Safras, Arabica sales in Brazil reach 30% of production, well below the same period last year and the five-year average, both at 39%. Many growers have concentrated efforts to prepare coffee for delivery and liquidation of forward sales, which inhibits new sales, says the consultancy.
The low price also ends up encouraging growers to hold coffee for further negotiation. Arabica coffee prices have been in a downward trend since April this year, but price drops were more significant in June, a scenario that concerns Brazilian players, according to Cepea.
In the case of conillon, the advance of the harvest and the slowdown in the external price curve of Robusta in London ended up bringing more sellers to the market, which explains the good performance of sales last month. Sales are at around 35% of the 2023 crop, still slightly below the 37% in the same period last year and below the five-year average of 38%.
The strong decline in the price of Arabica, especially for weaker cups, is beginning to attract interest from the local industry, which reduces the flow of conillon purchases and reinforces bearish signals, says Safras.
