MILAN – The shipment of increasing quantities of coffee for certification was largely responsible for the sudden drop in Ice Arabica prices recorded yesterday. The main contract for December delivery fell almost 3.5% to close at 247.60 cents, compared with far more marginal declines for the London exchange, which lost only 0.5 per cent to settle at $4,901.
Triggering the liquidations on Arabica futures was the weakness of the Brazilian currency.
The real Thursday fell to a 3-week low against the dollar, encouraging export selling from Brazil’s coffee producers.
Further pression – according to some insiders – was due to the prospect of an increase in certified stocks.
There were nearly 105,000 bags of coffee pending grading to enter ICE certified Arabica stocks on Wednesday, according to a recent report from the exchange, a sharp increase from the 28,585 bags seen at the end of last week.
On Thursday alone, the exchange reported the arrival of around 50,000 bags of Brazilian coffee at certified warehouses in the ports of Antwerp, Miami, Houston and New Orleans.
As of August 29th, 2024, ICE’s certified stocks amounted to 840.190 bags, of which 721.171 were transition stock, up from 831.685 the previous day.
“I think today the pressure is coming from the pending grading that showed up in the certified stocks report,” said a U.S.-based coffee broker quoted by Reuters.
“With the amount of coffee that Brazil has exported in July, August, buying FOB is not an issue. … The trade is certainly capable of putting up more volume to the board,” he added.
