Arabica coffee prices fell 1.3% to $3.82 per pound, although the market anticipates a 2.4% weekly gain. Dry weather in Brazil raises concerns about crop yield. Global traders have minimized purchases amid high prices. Cocoa futures rose 1.8%, but overall trends suggest volatility across commodities, with sugar also experiencing slight increases.
On Friday, Arabica coffee futures experienced a decline of 1.3%, bringing the price down to $3.82 per pound at 1212 GMT; however, the market is still projected to secure a weekly gain of 2.4%. A key factor influencing prices is the dry weather conditions in Brazil, the world’s leading coffee producer. While some rainfall has been forecasted, its potential impact on the crop remains uncertain.
Weather service Maxar has expressed concerns regarding the insufficient soil moisture and predominantly dry conditions, which they indicated would not favor cherry growth. The service noted that Brazil is expected to remain under a dry weather pattern for the subsequent five days, emphasizing the potential risks to coffee production.
In response to market pressures, global coffee traders and roasters have significantly reduced their purchases to minimal levels due to a considerable price surge. Suppliers have faced challenges in persuading retail stores to accept these increased prices, creating a tense market environment.
In other commodities, Robusta coffee futures fell slightly by 0.2% to $5,417 per metric ton. Meanwhile, in the cocoa market, New York futures rose 1.8% to $8,334 per ton; however, they are tracking towards a weekly loss of 8.7%, largely due to an improved production outlook for the 2024/25 season.
The International Cocoa Organization recently projected a global surplus of 142,000 tons, although BMI cautioned that tight stock levels may sustain elevated prices despite the positive outlook. In the London market, cocoa prices rose by 0.8% to 6,496 pounds per ton. Lastly, raw sugar futures saw an increase of 0.8%, reaching 18.28 cents per pound, while white sugar prices rose by 0.5% to $519.50 per ton.
The decline in Arabica coffee prices highlights the ongoing concern regarding weather conditions in Brazil, emphasizing the delicacy of agricultural market dynamics. Despite the current dip, traders are cautiously optimistic about a weekly gain. The cocoa market shows signs of stabilization but faces challenges from supply forecasts. Overall, the commodity market remains volatile, reflecting shifts in supply, demand, and weather patterns.
Original Source: www.tradingview.com
