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Market Update 31st March '23

Arabica futures fell to a 2-month low this week as favourable weather reports from Minas gerais sparked a sell-off on the part of funds. Prices found some support later in the week however as the Brazilian Real gained against the US Dollar (USDBRL).

Robusta prices continued to rise across the week, but any major gains were capped by the influence of bearish short-term fundamentals and technical indicators showing that contracts are approaching overbought levels.


Arabica prices struggled to cement a direction and continued to trade between the 168 USC/lb and USC 185/lb band, as they have for the previous 4 weeks. The KCK23 arabica contract for May closed down USC 4.78/lb (2.73%) for the week, to settle at USC 170.2/lb overnight in New York. Prices rose last Friday as funds covered short positions before the weekend, but funds again chose to take profits as prices hit the USC 184/lb resistance level. Prices continued to fall for the rest of the week based on short term bearish fundamental indicators before finding support on the back of a stronger Real at the end of the week.


The RMK23 Robusta contract for May tracked arabica pricing at the end of last week but failed to sustain momentum against a backdrop of consistent origin selling as producers in Vietnam were happy to respond to higher prices. Technical indicators also began to approach overbought levels which triggered further selling, leading to a number of long stops to trigger. The decline in prices was met by limited commercial buying also which usually serves to ease concerns on falling prices. Short covering near the end of the week saw a rally in prices however to sustain the general upwards momentum of the last 2½ months.

Market Events

Arabica indicators are still mixed as the market struggles to define a consistent up or down trend. Flooding concerns eased in Minas Gerais this week with drier conditions raising hopes that farmers will be able to apply fertilisers and pesticides to field.

Bearish fundamentals were outweighed by bullish ones this week however as Rabobank cut its estimates for the 2022/23 harvest by 1.3 million bags. This was echoed by projections from Colombia’s FNC predicting a 5% drop in exports year-on-year for the first half of 2023 due to excessive rains in producing regions. Smaller global coffee exports also served to support prices.

Robusta prices continue to find support on the predicted shortfall for the 2022/23 harvest. Short-term fundamental supply indicators are bearish however as ICE Robusta inventories continue to rebound and exports from Vietnam were up 9.2% year-on-year for March.


The information contained in this blog is intended to be general in nature and should not be taken as constituting professional financial advice. It does not take into account your objectives, financial situation or needs. We recommend seeking independent financial advice before acting on any of the information contained within.

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