Early this month, continuous nearby ICE coffee futures reached a ten-year high of $2.5020 per pound, still below the 2011 $3.00-plus record.

Costly freight prices led coffee growers in Brazil, Colombia, and Ethiopia to default on prior sales commitments and instead hold back their supply, per USDA. Growers may soon resell at more profitable prices, however.

Also, boosting the market are exports and weather. Brazil’s largest exporter and the world’s largest coffee co-op, Cooxupé, has reportedly sliced its 2021 coffee export projection from 6.5 million bags to 4.8 million bags.

Frost and drought conditions in Brazil have raised concerns over the state of crops for the 2022/23 season. Roughly 20 percent of coffee trees were ruined because of these conditions, reducing the overall stock for the coming season. Adding to that, around 12 million bags of coffee could be lost in Brazil’s next harvest, according to IGN.

Nearby Arabica coffee futures, ten-year history

Source: DTN
Posted by: Information Services
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