Arabica coffee futures declined 5.6% due to rain forecasts in Brazil, reversing previous gains. Cocoa futures rose slightly, while sugar prices showed minor declines as China’s agricultural plans were announced. Overall, market dynamics in coffee, cocoa, and sugar reflect shifting conditions and financial pressures.
Arabica coffee futures on the Intercontinental Exchange (ICE) decreased on Thursday, reversing earlier gains due to rain forecasts in Brazil, the world’s leading coffee producer. The Arabica coffee price settled down by 22.8 cents, or 5.6%, at $3.8715 per pound, after a notable increase of 2.9% the previous day. Concerns about soil moisture remained as hot and dry conditions had previously bolstered prices.
Market participants indicated potential heavy selling by funds as they sought to realize profits from prior long positions. Additionally, Brazilian coffee traders Atlantica and Cafebras have requested bankruptcy protection to restructure debts totaling 2.12 billion reais ($368.5 million), although this news was largely anticipated by the market.
Robusta coffee also experienced a decline, falling by 3.8% to $5,427 per metric ton. In Vietnam, domestic robusta prices increased amidst rising global prices, as local farmers held out for better offers. However, Vietnam’s coffee exports in the January-February period fell by 23.5% year-on-year, totaling 303,000 metric tons.
In the cocoa market, New York cocoa futures increased by $121, or 1.5%, settling at $8,187 a ton after previously touching a four-month low. Baader Helvea downgraded Swiss chocolate producer Lindt & Spruengli from “add” to “reduce” due to valuation concerns, along with potential volume and margin pressures as rising material costs necessitate price adjustments.
London cocoa futures also climbed by 1.2% to settle at 6,443 pounds per ton. In the sugar sector, raw sugar futures experienced a modest decline of 0.07 cents, or 0.4%, finishing at 18.13 cents per pound. China is set to expand oilseed cultivation while stabilizing sugar crops and cotton production, as stated in an official report. White sugar prices also fell by 1% to $516.90 per ton.
In conclusion, Arabica coffee prices have fallen sharply as Brazil anticipates returning rains, leading to concerns over soil moisture. The coffee market is seeing heavy selling from funds, while significant events like bankruptcy filings by Brazilian traders have been largely anticipated. Meanwhile, cocoa markets exhibit slight recovery amid pressure from high prices affecting consumption. Sugar futures continue to fluctuate in response to changing agricultural dynamics and market demands.
Original Source: www.tradingview.com
