MILAN – Arabica coffee futures skyrocketed to new highs on Monday on weather forecasts predicting a new cold snap in Brazil’s coffee belt in the second half of the week. The most active contract for September delivery at Ice Arabica rose almost 10% to a 7-year high of 207.80 cents per lb. Robusta coffee futures in London closed higher for the fifth straight session reaching a new contract high of $1,964, up $65 from Friday.
“It looks like we’re set for another explosive week ahead, with cold weather coming back into coffee-growing regions from midweek onwards,” Alex Boughton, a broker at Sucden, said in a note quoted by Bloomberg.
Forecasters expect more low temperatures in coming days, potentially damaging crops. The chance of frost has increased for Sao Paulo and south of Minas Gerais during a cold spell expected July 29, Somar Meteorologia said in a report.
Rural Clima said Wednesday that damage to coffee trees from last week’s frost in Minas Gerais was “very significant” after parts of South Minas Gerais saw the coldest temperatures in 27 years, reports barchart.
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