Arabica coffee futures declined 5.6% amid rain forecasts for Brazil, while cocoa prices stabilized after hitting a four-month low. Brazilian traders Atlantica and Cafebras sought bankruptcy protection, and sugar futures also saw fluctuations in response to market conditions.
Arabica coffee futures experienced a significant decline on Thursday, with a decrease of 22.8 cents, or 5.6%, settling at $3.8715 per pound. This drop followed a previous rise of 2.9% on Wednesday. Forecasters predict the return of rains to Brazil’s coffee regions next week, raising concerns about soil moisture due to recent hot and dry conditions. Dealers noted potential heavy selling by funds as some investors liquidated their positions to realize profits, particularly within the context of the National Coffee Association convention in Houston.
In Brazil, coffee traders Atlantica and Cafebras have sought bankruptcy protection to restructure substantial debts amounting to 2.12 billion reais ($368.5 million). This development was largely anticipated as it had been discussed in previous reports. Meanwhile, the prices of robusta coffee decreased by 3.8%, settling at $5,427 per metric ton. However, domestic robusta prices increased in Vietnam as local farmers anticipated higher prices in light of recent global price upticks. Vietnam’s coffee exports for the January-February period fell by 23.5% compared to the previous year, totaling 303,000 metric tons.
Cocoa prices in New York saw a slight uptick, settling up $121, or 1.5%, at $8,187 per ton. The market had previously reached a four-month low of $7,770. Notably, Baader Helvea downgraded Swiss chocolate manufacturer Lindt & Spruengli to “reduce” from “add” due to concerns regarding valuation and an uncertain outlook for 2025. JPMorgan also highlighted rising pressures for Lindt, attributing it to materials inflation nearing 25%, which will likely result in necessary price increases. Cocoa’s pricing has recently faced challenges as consumer demand for chocolate diminishes in the wake of historically high prices. Concurrently, cocoa prices in London rose by 1.2% to 6,443 pounds per ton.
Raw sugar futures concluded the session down 0.07 cents, or 0.4%, settling at 18.13 cents per pound, having reached a one-and-a-half-month low of 17.84 cents. In response to the current market dynamics, China, a leading global sugar consumer, is set to enhance the cultivation of oilseed crops while stabilizing production levels of sugar, cotton, and natural rubber. Furthermore, white sugar prices decreased by 1% to $516.90 per ton.
In summary, the coffee market experienced a notable downturn influenced by potential rain forecasts in Brazil and profit-taking by investors. Cocoa demonstrated slight resilience in the face of market pressures, despite concerns over high prices impacting consumption. Additionally, the sugar market continues to show volatility with China planning to stabilize crop production amid fluctuating global prices. These developments highlight the complexities present in agricultural commodity markets.
Original Source: www.tradingview.com
