Coffee: optimism with supply increases and drops prices in New York | Quotes

Concerns surrounding the supply of Robusta coffee ceased, at least momentarily, which paved the way for a drop in the value of arabica traded on the New York Stock Exchange. Contracts due in July fell 4.58% this Thursday (2/5), to US$ 2.0610 a pound.

The record of rainfall in Vietnam – the world’s largest producer of Robusta – has partially alleviated concerns about the harvest in the country, which should begin in November. This scenario resulted in a drop in Robusta prices on the London Stock Exchange, which impacted prices in New York.

“Market agents are now looking at two support points for Robusta coffee, one at around US$3,800 per ton and the other at US$3,200. I understand that if the price in London stays below US$3,800, there will be room for arabica to reach US$1.90 per pound on the New York Stock Exchange”says Vicente Zotti, partner at Pine Agronegócios.

He also credits the decline in coffee to a seasonal moment, marked by the beginning of the harvest in some regions of Brazil, the country that exports the most arabica in the world.

“The new harvest [2024/25] will be greater than that harvested last year. In terms of supply, arabica has a much looser balance compared to previous years”, he comments.

Despite the start of the harvest in Arabica regions, Zotti believes that the crop situation in Vietnam can still lead to new highs for coffee in New York.

“If the main point of support for Robusta values ​​was the climate in Vietnam, this problem is not over yet. If the weather worsens until November, won’t funds bet on higher prices again?”he questions.

After a sharp drop of more than 10% in the last session, cocoa fell again in New York. Contracts for July closed down 8.70%, quoted at US$7,563 per ton.

Amid the fundamentals of restricted supply, the falls at the moment are mostly driven by the movement of speculative funds, which are now pocketing profits after prices reach historic levels on the stock exchange.

Cotton

The price of cotton continued to fall on the stock exchange. Lots for July closed down 1.16%, to 75.62 cents per pound.

Orange juice and sugar

The prices of frozen concentrated orange juice (FCOJ) and sugar rose in New York. Juice batches for July increased 0.78%, with a price of US$3.7290 per pound. In relation to sugar, contracts with the same delivery date closed up 0.16%, to 19.25 cents per pound.