MILAN – Arabica coffee futures rebounded slightly on Tuesday in the first session of the week following Christmas festivities on short covering sparked by a stronger Real. The Brazilian currency climbed yesterday to a 4-1/2 month high against the dollar, discouraging export selling. In London, trading was closed for the Boxing Day holiday.
In New York, the most active contract for March delivery closes 194.35 cents per lb, a 155-point increase from last Friday. Last week, the New York market hit its highest since April surpassing the $2 dollar mark.
The market remains supported by limited supplies, with low inventories in consuming countries, along with weather-related problems for production in Asia and South and Central America.
Traders also worry about delays in the flow of containers used to transport coffee around the world due to the attacks against vessels in the Suez Canal, report news sources
However, France’s CMA CGM said it is increasing the number of vessels travelling through the Suez Canal joining Maersk in returning to the area after U.S.-led efforts to prevent attacks, according to Reuters
Weather conditions within Mexico, Colombia and Central America, have been reported to be conducive for harvest and drying activities to take place, said the trader I. & M. Smith in a recent update.
According to data cited by I. & M., this producer bloc is forecast to collectively produce 31.50 million bags in the October 2023 to September 2024 coffee crop, steady year on year, with harvest within the lower lying areas of this largest washed arabica producer bloc well underway.
Coffee production for the October 2023 to September 2024 coffee year in Colombia is forecast to potentially be 15.50% higher than the previous coffee year at a total of 12.60 million bags. This is forecast, although improved year on year is shy of the country’s average potential production of around 13.60 million bags per seasonal year.
In Mexico coffee production for the October 2023 to September 2024 Coffee year is forecast to remain steady at an estimated total of 3.40 million bags.
Guatemala meanwhile is expected to produce marginally more than the previous year, to potentially produce 3.50 million bags, whereas
Honduras is likewise anticipated to have a 7.02% decrease in production year on year at a total of 5.30 million bags.
