MILAN – ICE Arabica coffee futures traded solo on Tuesday for a shortened day, with the London market still closed for the Christmas holiday. The most active contract for March delivery fell 505 points of 2.9% to 166.95 per lb, from a one-week peak of 172.65 cents reached on Friday.
Prices were under pressure from a 1.3% decline in the Brazilian currency that dropped to a one-week low. A weaker real encourages selling from Brazil’s coffee producers. Dealers said some investors unwinded on Tuesday protective positions built prior to the long holiday, according to Reuters.
The Certified Arabica coffee stocks held against the New York exchange fell slightly to 787,005 bags, mostly originating from (Brazil 448,047 bags) and Honduras (312,806 bags), with over 90% of these certified stocks being held in Antwerp.
Brazil had slightly drier-than-normal conditions in the coffee belt. Somar Meteorologia reported Monday that Brazil’s Minas Gerais received 31.7 mm of rain last week, or 72% of the historical average.
This Brazilian state accounts for about 30% of Brazil’s Arabica crop.
In other news, Uganda’s coffee exports declined 15% in November from the same period a year ago to 447,162 60-kilogram bags, as scarce rainfall reduced yields in some regions.
According to UCDA, a “drought in most regions for the second consecutive year led to increased incidences of pests and diseases such as the coffee twig borer and red blister disease.”
The twig borer is a beetle that thrives in dry conditions, which have become more common in recent years and could become an even greater threat as the result of climate change.
The National Bureau of Statistics have reported that Kenya exported 721,800 bags during the January 2022 to October 2022 period.
This is 31% higher than the equivalent period in the previous year. Coffee production in the east African nation for the current October 2022 to September 2023 coffee year is forecast to be 14.28% higher than the previous coffee year at a 800,000 bags.
