Arabica coffee futures fell 2.4% to $4.0005 per lb, reversing gains amid supply concerns from Brazil. Cocoa prices increased 2.1% to $8,238 per metric ton despite previous lows, while raw sugar futures remained unchanged. The market reacts to restructuring within Brazilian coffee producers and inflationary pressures impacting chocolate manufacturers.
On Thursday, Arabica coffee futures on ICE saw a decline of 2.4% to $4.0005 per lb, reversing previous gains that approached record highs amid supply concerns. Ongoing worries stem from adverse weather conditions in Brazil, despite forecasts indicating upcoming rain.
Brazilian coffee traders Atlantica and Cafebras filed for bankruptcy protection to restructure debts amounting to 2.12 billion reais ($368.5 million). Despite this, the market had largely factored in the news as it was anticipated earlier. Meanwhile, Robusta coffee prices also dropped 1.1%, down to $5,594 per metric ton, though domestic prices in Vietnam rose this week as farmers seek higher profits.
In the January-February period, Vietnam reported coffee exports of 303,000 metric tons, a reduction of 23.5% compared to last year. The cocoa market showed resilience with New York cocoa prices climbing 2.1% to $8,238 per metric ton, after previously hitting a four-month low.
Concerns have surfaced regarding Swiss chocolate manufacturer Lindt & Spruengli due to valuation issues and a downgrade from Baader Helvea. J.P. Morgan expects rising pressures on both volume and margins as raw material costs inflate significantly, prompting potential price increases. Concurrently, London cocoa prices rose 1.7% to 6,477 pounds per ton.
Raw sugar futures remained stable at 18.20 cents per lb, with short covering counteracting recent declines. Talks of Chinese buying have circulated, though no confirmations exist. A report indicated that China aims to enhance cultivation of oilseed crops while stabilizing sugar, cotton, and rubber production. In contrast, white sugar prices did fall by 0.8% to $518.10 per ton.
The preliminary analysis highlights volatile trends in coffee and cocoa markets driven by supply concerns, particularly in Brazil, while sugar prices remained stable. The Brazilian coffee sector faces restructuring challenges, and cocoa prices are prompted by consumer and manufacturer pressures. Sugar markets are influenced by potential Chinese market activity and strategic agricultural adjustments.
Original Source: www.tradingview.com
