MILAN – Ice Arabica coffee futures nosedived to their lowest levels since May 2021. The main contract for March delivery lost 700 points to close at $1.4390 per lb after touching an intraday low of $1.4205. London futures for Robusta coffee closed $29 down at $1,811.
According to dealers, rains in Brazil and forecasts for more showers boosted the outlook for the Arabica crop in the world’s top producer.
On Wednesday, coffee importer Wolthers Douque projected that Brazil’s 2022/23 coffee crop would increase by +16% y/y to 65 million bags due to improved weather conditions.
In addition to that, ICE Arabica coffee inventories have risen steadily since falling to a 23-year low of 382,695 bags on Nov 3 and posted a 6-month high of 850,401 bags on Jan. 11. There were also 170.024 bags pending grading.
The latest Commitment of Traders report from ICE Arabica has seen the longer term in nature Index Fund sector of this market marginally decrease their net long position by 0.12% within the market, to register a new net long position of 34,791 lots.
Robusta coffee futures in London had support on signs of tighter supplies after ICE-monitored certified Robusta coffee inventories last week fell to a 4-1/2 year low.
Meanwhile, Vietnam continues to process the harvest in the current 2022/23 coffee crop, which is anticipated to produce a median estimate coffee crop of 28.50 million bags.
Preparations are already underway ahead of the Tet Lunar New Year celebrations, to be observed in the second half of January this year.
The General Statistics Office of Vietnam reported Monday that Vietnam’s Jan-Dec coffee exports were seen up 13.8% year-on-year at 1.8 metric tons.
