Friday 12 July 2024
  • La Cimbali

Robusta futures surge to new highs, Rabobank forecasts prices to range between $2,480-2,750

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MILAN – Robusta coffee futures surged to new highs on Wednesday on tight supplies and a weaker dollar. In London, the most active contract for September delivery closed up $53 (+2.1%) to a new record-high of $2,636 a tonne. In New York, the front month rose 280 points to a two-week high of 185.40 cents per lb. Ice Arabica certified stocks fell yesterday to a new 6-1/2 month low of 555,206 bags also supporting the prices.

In its new Gain Report, the U.S. Department of Agriculture (USDA) expects farmers in Brazil will harvest 12% more Arabica in the 2023/24 season, and 5% less Robusta. According to weather services, Brazil coffee areas are unlikely to be threatened by a cold snap later in June.

Tightness in Robusta coffee supplies with an increased demand from roasters who are substituting Arabica beans for cheaper Robusta beans in a variety of retail coffee blends are keeping prices at record levels.

Rabobank said robusta should trade between $2,480-2,750, with the top end of its forecast pointing to a new record high as exports from Brazil remain weak, and local demand is firm.

The latest weather forecast reports to come from the U.S. Governments National Weather Service’s Climate Prediction Centre anticipate that a transition from El Niño Southern Oscillation (ENSO) neutral conditions could occur by October, with a 90% chance that El Niño weather conditions are expected to come into play towards the end of the year.

This weather phenomenon could bring partial drought conditions for the Pacific rim coffee countries such as Colombia and Indonesia. It could also cause increased rainfall for the coffee districts in South East Brazil.

CIMBALI
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