MILAN – Coffee futures fell sharply on both exchanges in the final session of the week. On Friday, 20 September, Ice Arabica’s main contract for December delivery lost 1,090 points, plunging to 250.75 cents, its lowest level since 12 September. According to the most recent Cot, Funds increased their net long position in Arabica coffee by 4,546 to 43,630 lots, in the in the week to September 17.
The Certified washed Arabica coffee stocks held against the Ice Arabica rose slightly on Friday to total 838.536 bags held for the most part in Europe.
Ice Robusta coffee futures also suffered heavy losses, falling $189 to close at $5059, well below its mid-week high of $5,334.
The sell-off in both markets was triggered by weather forecasts coming from Brazil, where models are predicting rain later this week during the crucial flowering period of the new crop.
However, not everyone is optimistic. According to Escritório Carvalhaes, the rain will be erratic and of low intensity, hardly enough to reduce the heat.
In fact, a survey of more than 1,700 producers predicts a 23% drop in Arabica production for the 2024/25 crop year.
This is a much worse picture than the one depicted by the official Conab estimate, which indicates a modest decline of 0.5%.
The negative and lower-than-expected result was caused by adverse weather conditions, with scattered and poorly distributed rainfall during the fruit development period, according to the source.
The field survey was carried out in four production regions: Montanhas de Minas, Sul de Minas, Chapada de Minas and Cerrado Mineiro.
Analysts pointed out that this year’s prolonged drought will also have a negative impact on the next harvest.
