MILAN — Coffee futures prices turned lower again in the last session of the week. In London, the contract for September delivery fell $93 on Friday, to close at $4302, its lowest level in three weeks. September Arabica in New York lost 445 points also to settle at a three-week low of 230.25 cents. Prices continue to be pressured by the faster pace of harvesting in Brazil.
According to the most recent Safras & Mercado update, the harvest was 81% complete as of 23 July, up from 77% a year ago and against a five-year historical average of 77%.
The Robusta harvest is now close to completion (95%). The Arabica harvest is three quarters (75%) complete, at an estimated volume of 33.98 million.
Safras & Mercado recently cut its estimate for this year’s Brazilian harvest (2024/25) to just over 66 million bags, from the previous figure of 70.4 million.
“The downward revision in the crop size reinforces the view that the harvest this year will be concluded earlier (than in other seasons),” Safras consultant Gil Barabach said in a statement on Friday.
Vietnam’s coffee exports fell sharply in July. According to preliminary data from the General Bureau of Statistics (GSO), exports in July were only 1,166,667 bags: over a third less (-35.7%) than the same month a year ago.
This brings the total since the beginning of the current coffee year to 26,421,684, still 6% more than in the same period of 2022/23. Finally, exports for the first 7 months of the calendar year amounted to 16,066,667 bags, down 13.8% compared to 2023.
Despite the lower volumes, export earnings are estimated to have grown by 31% to $3.5 billion.
Citi also revised down its crop estimates for Brazil and Vietnam. As a result, the bank now forecasts a surplus in the global coffee market of just 100,000 bags for 2023/24.
Also according to Citi, Arabica coffee futures prices will average 245 cents in the third quarter, 10 cents higher than the previous forecast.
