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Ice Arabica futures at new highs on adverse weather concerns, benchmark close to the $2 mark

MILAN – Arabica coffee futures in New York surged Monday to a one- month high with on adverse weather forecasts from Brazil. The most active contract for December delivery rose 4% to close at 199.90 cent/lb after reaching an intraday high of 200.20 cent/lb. A rally in the Brazilian currency was also supportive for Arabica prices. ICE Robusta did not trade with markets in the UK closed for a bank holiday.

While weekend rains brought relief to central regions of the country, including Mato Grosso do Sul, parts of Parana and Sao Paulo, rainfall didn’t reach Minas Gerais, the top coffee-growing region, said Donald Keeney, senior meteorologist for Maxar Technologies Inc. quoted by Bloomberg.

Major arabica areas of Sao Paulo and Minas may also face dry conditions and above-normal temperatures in the next two weeks, according to Somar Meteorologia.

Brazil’s coffee-growing areas may see dry conditions and above-normal temperatures over the next two weeks that will further reduce soil moisture levels.

Water availability in the soil in Minas Gerais is already at critical levels between 0% and 30% when the minimum level for crop development is 60%, Somar also reported.

Vietnam has added to concerns over global supplies for Robusta coffee as the country’s biggest city remains in lockdown and the exporting hub of Ho Chi Minh has been kept under tough travel restrictions after a surge in cases of the Delta variant of the coronavirus.