MILAN — Coffee markets started the week on a downward trend, amid continuing uncertainty over the fate of the new Eudr regulation and its impact on futures contracts and trade. Both markets posted two consecutive sessions in the red, although the losses were limited. In New York, the main contract for March delivery lost a total of 2 cents, to settle yesterday, Tuesday, 19 November, at 281.30 cents, after having reached a new record-high intraday price of 291.50 cents on Monday.
London lost $117 in two days ending yesterday’s session at $4,656.
Improved weather conditions in Brazil helped to ease tensions and encouraged a consolidation to the downside.
On the other hand, last week’s vote in the European Parliament is still fuelling uncertainty and speculation among investors in the coffee markets.
The proposed amendments need to be approved by all three EU institutions and will be considered by the EU Commission and EU Council this week.
Only once the new text has been adopted and published in the EU Official Journal will it enter into force.
Something not to be taken for granted, according to Intercontinental Exchange Inc. In fact, it is “unclear at this time if the delay will be adopted or if the EUDR will enter into application” on Dec. 30, the ICE said in a Friday statement.
This is why the ICE is delaying its plan for coffee and cocoa contracts to the end of 2025 to “provide market participants with certainty” as to what products are being delivered against futures contracts, according to the release. The postponement will take place regardless of whether the EUDR’s implementation is delayed by a year, ICE said.
The changes would apply to the Arabica and Robusta coffee contracts, as well as the London cocoa contract, and would concern the requirements for certifying that goods comply with the Eudr, as well as the creation of transition stocks that are deliverable at a discount against futures contracts, for a certain period of time.
In other news, Luckin Coffee – China’s leading coffeehouse chain – has entered into an agreement to buy 4 million bags of Brazilian coffee during the 2025-2029 period, Brazil’s trade ministry said in a statement on Tuesday.
The deal is between Luckin and Brazilian Trade and Investment Promotion Agency, and follows a previous partnership signed in June, when the Chinese company agreed to buy the equivalent of 2 million bags by the end of 2024, reports Bloomberg. Details on which companies will be supplying Luckin weren’t disclosed.
The signing took place yesterday, coinciding with Chinese President Xi Jinping’s visit to Brazil for the G20.
Nestlé will continue raising prices and make packs smaller to limit the impact of higher bean prices and attract thrifty consumers.
The Swiss giant has had two rounds of price increases since 2022 said David Rennie, head of coffee brands at Nestlé, in an interview with Reuters adding that the company has the advantage of a product portfolio that includes instant coffee and is less dependent on roast and ground coffee than some of its competitors.
To meet consumer needs, Nestlé intends to further diversify its offering by introducing a wider range of formats and pack sizes at various price points.
