MILAN – Uncertainty over the upcoming crop seasons in some of the world’s leading coffee producers led to a new rebound in Robusta prices in the last session of the week at the London terminal, with the main contract for September delivery posting a +4.42% increase to close the day at $2,621. The ICE Robusta benchmark rose to a 15-year high of $2,770 on June 20th.
Also in June, the monthly average of the ICO indicator price for Robusta coffee reached a 28-year high of 122.55 cents/lb.
In New York, the September contract recovered slightly on Friday from a 5-month low of 158.90 cents per lb hit on July 5th and ended the week at 160.90 cents per lb.
The latest Commitment of Traders report from ICE Arabica market has seen the Non-Commercial Speculative sector increase their net short position by 167.17% within the market over the week of trade leading to Tuesday 4th. July 2023: to register a new net short position of 10,523 lots.
In London, the COT has seen the Speculative Managed Money Sector cut their net long position by 13.40% within the market over the week of trade leading to Tuesday 4th. July 2023: to register a new net long position of 40,626 lots.
In July, the coldest month in austral winter, the coffee market is traditionally dominated by frost fears in Brazil’s coffee belt, but all forecast models seem to rule out this risk in the current week.
Harvesting operations are in full swing. According to Safras weekly monitoring, Brazil had reaped 52% of the 23/24 crop, as of July 4th, which corresponds to an increase of 7% compared to the previous week.
Work exceeded the same period last year, when growers had reaped 48% of the crop, but it is still below the five-year average of 56%.
The Arabica harvest reaches 43% of the expected output, against 40% at the same time last year and 47% on the five-year average.
Besides being faster, the production result is positively surprising, with growers reaping more than expected, says Safras
The quality profile of the crop is also positive, although the projection of growing moisture for the coming few months generates some concern.
