MILAN – Yesterday at the reopening after the bank holiday weekend, the Ice Robusta coffee futures resumed their upward trend to new historical peaks. New York coffee futures also went up sharply after Monday’s more modest gains. In London, the contract for November delivery gained 2.8% yesterday, Tuesday 27 August, closing at a new all-time high of $4,846 (intraday at $4,952).
The Ice Arabica’s contract for December delivery gained 2.2%, to settle at 255.25 cents, after having reached an intraday high of 259.45 cents, the highest level for the benchmark in two and a half years. In Brazil, the 2024/25 crop, which is almost completed, is coming in below initial expectations.
There are also fears that this year’s weather events – frost and, above all, the ongoing prolonged drought— may negatively impact next year’s harvest (2025/26).
According to Cooxupé, there has been no significant rainfall in several growing regions of Brazil for around 130 days.
Meanwhile, the first flowerings of the new Robusta crop has already begun in some areas of Espírito Santo, while flowering in the Arabica areas will begin with the arrival of the early spring rains, between September and October.
The Robusta market continues to be affected by the situation in Vietnam, where the weather has improved, but not enough to offset the negative impact of the drought in the first half of the year. In the first seven months of the year, the Indochinese country exported 16.066 million bags.
This represents a 13.8% drop in volume compared to the same period last year, but is offset by a 30.9% increase in value, to a record $3.54 billion.
According to an estimate made in early August by the authoritative Vietnam Coffee and Cocoa Association (Vicofa), Vietnam currently has only about 148,000 tonnes of coffee left to export in the remaining 2 months of the 2023/2024 crop year.
Meanwhile, it is interesting to note that Espírito Santo – Brazil’s largest Robusta producing state – has increased its exports of all forms of coffee to the European Union almost eightfold this year.
Shipments to EU countries totalled 2.3 million bags in the first seven months of the year, mostly (2.25 million) green coffee: almost 2 million bags more than in the same period last year.
The EU thus absorbed 42.7% of the state’s exports, compared to 15.6% 2023. The main destination market was Belgium, with 805,700 bags, followed by Italy, with 462,900 bags, Germany (349,900 bags) and Spain (317,900 bags).
According to Enio Bergoli, Espírito Santo’s Secretary of State for Agriculture, increased exports towards the EU were also due to Vietnam’s lower exports and the logistical difficulties caused by the international situation, as well as the prospect of the imminent entry into force of the EUDR regulation.
But the result also reflects the investments in quality, productivity and advanced agronomic technologies made by producers in this Brazilian state.
