Arabica coffee futures fell 5.6% amid rain forecasts in Brazil, while cocoa prices steadied after hitting a four-month low. Concurrently, robusta coffee prices declined, with Vietnam’s coffee exports decreasing significantly. Sugar futures also slightly dropped, influenced by China’s agricultural strategy.
On Thursday, Arabica coffee futures experienced a notable decline of 5.6%, settling at $3.8715 per pound, despite a previous gain of 2.9%. The drop followed forecasts of impending rains in Brazil, a major coffee-producing region, where recent hot and dry conditions had elevated prices but raised concerns over soil moisture.
Market observers noted substantial selling by funds, prompting a liquidation of long positions to secure profits. Additionally, Brazilian coffee traders Atlantica and Cafebras have sought bankruptcy protection, aiming to restructure debts amounting to 2.12 billion reais ($368.5 million), a situation already anticipated by market players.
In contrast, robusta coffee prices fell by 3.8% to $5,427 per metric ton. Domestic robusta prices in Vietnam rose slightly, driven by global price increases and farmers’ expectations for better pricing. Vietnam’s coffee exports for January-February dropped 23.5% year-on-year, totaling 303,000 metric tons.
Cocoa markets showed resilience, with New York cocoa prices increasing by 1.5% to $8,187 per ton, recovering from a four-month low of $7,770 earlier in the week. Concerns linger regarding the long-term impact of high prices on chocolate consumption, prompting Baader Helvea to downgrade Lindt & Spruengli’s stock due to evaluations and future uncertainties.
Cocoa market dynamics also reflect rising input costs, with JPMorgan indicating that a material inflation of nearly 25% is likely to lead to price hikes for manufacturers. Meanwhile, London cocoa experienced a moderate rise, settling at 6,443 pounds per ton.
Meanwhile, sugar futures saw a slight decline of 0.4%, settling at 18.13 cents per pound, after hitting a 1.5-month low. In the context of agri-crop management, China aims to enhance oilseed crop cultivation while stabilizing the production of sugar and other commodities, impacting global sugar dynamics. White sugar prices also fell by 1%, settling at $516.90 per ton.
The article highlights a mixed outlook for various commodities, notably Arabica coffee’s significant decline due to anticipated rains in Brazil and market speculations, while cocoa shows intraday recovery despite long-term pressures. The sugar market continues to experience fluctuations influenced by international agricultural policies and market demands. Overall, these developments reflect complex interdependencies in the commodity markets affecting producer strategies and consumer pricing.
Original Source: www.tradingview.com
