Arabica Coffee Prices Decline Amid Weather Concerns in Brazil

Arabica coffee prices fell by 1.3% to $3.82 per pound, while cocoa futures rose 1.8% to $8,334 per ton. Traders have cut purchases sharply due to high prices. Raw sugar futures increased by 0.8% to 18.28 cents per pound. Weather concerns in Brazil impact coffee output prospects.

On Friday, Arabica coffee futures experienced a 1.3% decline, settling at $3.82 per pound, though they remained poised for a weekly increase of 2.4%. The primary concern revolves around dry weather in Brazil, the world’s leading coffee producer, where weather service Maxar warned that unfavorable soil moisture would hinder cherry growth, predicting a predominantly dry pattern for the next five days.

Due to a significant price surge, global coffee traders and roasters have dramatically reduced purchases to minimal levels, as suppliers struggle to persuade retail stores to accept higher prices. Meanwhile, Robusta coffee prices slightly declined by 0.2%, reaching $5,417 per metric ton.

In the cocoa market, New York cocoa futures rose by 1.8% to $8,334 per ton, although the market is likely facing a weekly loss of 8.7% due to an improving production outlook for the 2024/25 season. The International Cocoa Organization projected a global surplus of 142,000 tons, indicating that while stock levels remain tight, prices may still stay elevated. London cocoa also rose by 0.8% to 6,496 pounds per ton.

In the sugar market, raw sugar futures increased by 0.8%, reaching 18.28 cents per pound, while white sugar prices rose by 0.5% to $519.50 per ton. Overall, the coffee, cocoa, and sugar markets exhibit varied trends influenced by weather conditions, production forecasts, and market demand.

In summary, Arabica coffee prices declined slightly amidst ongoing concerns regarding Brazil’s weather, despite a potential weekly gain. Traders have significantly reduced purchases due to sharply rising prices. The cocoa market is experiencing a mixed response to an improving production outlook, while sugar prices exhibit slight increases. As these markets evolve, the interplay of supply, demand, and environmental factors remains pivotal.

Original Source: www.tradingview.com