Arabica coffee futures fell 2.4%, influenced by supply concerns in Brazil. Cocoa prices increased by 2.1% after hitting recent lows. Robust coffee prices declined, while Vietnam faced reduced exports. Sugar futures remained unchanged amid speculation of Chinese buying.
On Thursday, Arabica coffee futures on the Intercontinental Exchange (ICE) declined by 2.4%, settling at $4.0005 per pound. The drop followed a previous increase that brought prices close to recent record heights, largely due to ongoing supply concerns in Brazil, the leading coffee producer, which has faced adverse weather conditions. Despite some rain on the horizon, Brazilian coffee traders Atlantica and Cafebras have sought bankruptcy protection while aiming to restructure a significant debt total of 2.12 billion reais ($368.5 million). This news has been considered largely anticipated as it was previously reported.
Robusta coffee prices also saw a decline, falling by 1.1% to $5,594 per metric ton. However, domestic robusta prices in Vietnam have increased, driven by a rise in global coffee prices and farmers’ willingness to hold out for better pay. This year, Vietnamese coffee exports for January and February were reported at 303,000 metric tons, reflecting a decrease of 23.5% compared to the same timeframe last year.
In cocoa markets, New York cocoa prices increased by 2.1% to $8,238 per metric ton, recovering from a four-month low of $7,770. Concerns regarding high historical cocoa prices potentially impacting chocolate consumption have pressured the market. Additionally, Baader Helvea downgraded Swiss chocolate producer Lindt & Spruengli from “add” to “reduce” due to valuation issues and uncertain forecasts for 2025. Moreover, J.P. Morgan noted anticipated increases in volume and margin pressures for Lindt, suggesting future price hikes due to raw material inflation approaching 25%.
Conversely, raw sugar futures remained steady at 18.20 cents per pound despite recent drops. Short covering and speculated Chinese purchasing have curbed the decline. A report indicated that China, a major sugar consumer, plans to enhance oilseed cultivation while stabilizing sugar crop production. However, white sugar price decreased by 0.8%, settling at $518.10 per ton.
In summary, coffee prices have experienced a notable decline, attributed to supply concerns in Brazil and bankruptcy issues affecting local traders. Cocoa, while facing pressure from high prices, has managed to gain slightly. Meanwhile, sugar futures have stabilized despite recent fluctuations, with ongoing discussions regarding Chinese purchasing and agricultural plans influencing the market. The overall commodity landscape demonstrates a mix of challenges and responses as producers adapt to current market conditions.
Original Source: www.tradingview.com
