We're taking a break from the news but wanted to keep you updated on the happenings in global coffee markets. Read on to find out what happened with arabica and Robusta prices this week.
Whilst arabica lost some of the gains of last week by close in New York on Friday night, it has slowly continued to increase in price over the week. Gains however have been moderate and are yet to reach last week’s high of 181 USC/lb, with contracts trading within a 6 USC/lb range. The KCH23 March contract closed at just under 175 USC/lb overnight in New York.
Robusta followed a similar trajectory for the week, posting a high of USD $2092/ton on Wednesday in London before falling over the last couple of days to achieve a moderate gain of around USD $20, with the RMH23 contract closing at USD $2045/ton overnight in Thursday in London.
The steady increase in ICE warehouses remains a bearish factor for arabica, with inventories sitting at a 7-month high of 892,000 bags.
Vietnam, the world’s largest grower of Robusta, published export numbers for 2022 exports, reporting an increase of 14% year-on-year. This was greeted as a bearish indicator by traders, keeping price gains in Robusta markets moderate also.
Bullish factors currently outweigh the bearish at the moment however, with smaller coffee exports from Colombia and heavy rains in Brazil keeping farmers out of fields in Minas Gerais both helping to support arabica prices this week. The rains in Minas Gerais have meant delays in the application of fertilisers and pesticides and has led to an increase of coffee rust in some areas.
Tightness in global supplies continues to support Robusta prices as predictions for the harvest in both Vietnam and Indonesia are both very low for the year. ICE Robusta inventories are also at lows not seen since 2016, with less than 6,000 lots in warehouses.