MILAN – Coffee futures markets yesterday saw sharp declines in New York and London. Weather forecasts reported rising temperatures for the rest of the week with low risk of frost. There were fears of a return of frost on the night of Monday 12 to Tuesday 13 August. Fortunately, these fears subsided and prices fell on profit-taking, after the sharp rises seen in the first session of the week.
The front months in New York and London (September) lost 3.38% and 3.46%, falling to 232.70 cents and $4,375 respectively. New York’s contract for December delivery fell nearly 4%to 229.05 cents. London’s contract for November delivery fell 3.9% to $4,187.
Also contributing to the declines of coffee futures was positive data on Brazilian exports, which increased by 25.7% last month to over 3.77 million bags.
In other news, the Coffee Board of India have estimated the current October 2023 to September 2024 coffee crop to reach similar levels to the previous year at a total of 6 million bags, a figure in line with earlier reports from independent forecasters.
The Coffee Board have also pointed out that coffee production for 2024-25 may be significantly lower as there has been a considerable loss of plants and berries on account of high temperature, heavy rainfall and landslides in the country’s coffee heartlands.
High temperatures during April and May, which are crucial months for coffee blossoms, resulted in the scorching of blossom clusters and the burning of fruit at their pinhead size, severely affecting the early stages of coffee development.
These warmer than usual temperatures were followed by heavy rainfall during July and throughout the first half of August, which caused severe soil erosion, waterlogging, and landslides in several key coffee-producing areas.
These weather events led to widespread damage, including berry dropping, stalk rot, and wet foot conditions caused by flooding. In Wayanad, Kerala, over 200 acres of coffee plantations were washed away in a single landslide, drastically reducing the region’s production capacity.
