Arabica coffee futures hit a new all-time high on Thursday, driven by extremely tight supplies and fears over the outlook for the upcoming harvest. Brazil, the world's largest arabica producer, faces a significant supply shortfall due to last year's drought. Robusta coffee prices also rose, fueled by withholding sales from Vietnamese farmers and anticipated shipping disruptions.
The upward trend in coffee prices persisted on Thursday as arabica futures on the ICE exchange reached a new record, nearing $4 per lb. This surge is driven by extremely limited supply and growing concerns about the upcoming harvest. Arabica coffee futures in New York, serving as the benchmark for pricing deals globally, hit an all-time high of $3.7685 per lb earlier in the day, marking a gain of over 15% this year alone. They closed the day with a 1.9% increase, settling at $3.734 per lb.
Industry insiders reported that major roasters like Nestle and JDE Peet’s are currently understocked and have a significant amount of purchasing to undertake. Simultaneously, speculators maintain a positive outlook on coffee prices. The supply situation remains extremely tight in Brazil, the world’s largest producer of arabica coffee, after last year’s severe drought significantly reduced forecasts for the upcoming crop. Brazil accounts for nearly half of the global arabica production.Trishul Mandana, managing director of Volcafe, one of the world’s leading coffee traders, highlighted the fundamental reason behind the price surge: “The real story is that supply has fallen much faster than demand. It really is that simple.” Mandana further emphasized the severity of the situation: “The tightness in Brazil and the current differentials are telling us the real story of the 24/25 crop – and which will no doubt quickly lead to the disappearance of certs (arabica-certified stocks at ICE). And things could get messy rather quickly.” Certified arabica stocks have been dwindling rapidly in recent days, dropping nearly 100,000 bags to approximately 900,000 bags. While there were initial hopes that the situation in Brazil for the new crop might not be as dire as initially feared due to rainfall in recent months, recent weather forecasts have rekindled anxieties. Icona Cafe, a trader, reported in its analysis that “Below-average rainfall in some (Brazilian) regions has once again fuelled fears,” citing forecasts predicting prolonged periods of dry weather and rising temperatures in key coffee-growing regions over the next few weeks.Supply constraints are also affecting robusta coffee, which, although used primarily for instant coffee rather than roast and ground blends, can be partially substituted for arabica. Robusta coffee rose by 2.2% to $5,734 a ton, just shy of its all-time high. Farmers in Vietnam, the world’s leading robusta producer, are holding back sales, anticipating further price increases. A sharp decline in trade and shipping is anticipated at the end of January due to the Lunar New Year festivities.In other soft commodities, New York cocoa futures fell by 4.6% to $11,207 a ton, while London cocoa lost 3.5% to 8,817 pounds per ton.
COFFEE PRICES SUPPLY DEMAND BRAZIL ARABICA ROBUSTA FUTURES ICE EXCHANGE
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Gas Prices Soar, Bitcoin Bounces Back, and Steel Deal Faces UncertaintyEuropean natural gas prices reach a year high as Russia halts Ukraine transit. Bitcoin sees volatility, rebounding after December dip. U.S. Steel takeover bid hinges on concessions amid political uncertainty.
Read more »
Canadian Stamp Prices Soar 25% on January 13thConvenience store owner Donald Chang warns customers in Windsor, Ontario to stock up on stamps before January 13th as prices for Canadian stamps and other postal products are increasing by 25%. Chang notes that the substantial increase will impact everyone, especially during a challenging economic time. Canada Post claims the price hike aligns postage costs with service expenses.
Read more »
Middle-Class Families Turn to Housing Charities as Homeownership Prices SoarRising housing costs are pushing middle-class families to seek assistance from housing charities, traditionally focused on low-income earners. Organizations like Habitat for Humanity and Options for Homes are adapting their programs to meet the increasing demand, helping families with incomes once considered too high for affordable housing.
Read more »
Super Bowl Ad Prices Soar to $8 MillionA traveler passes a Super Bowl advertisement at Louis Armstrong New Orleans International Airport. Some 30-second Super Bowl commercials this year are selling for $8 million.
Read more »
Canada's Egg System Weathering the Storm While US Prices SoarAvian flu and holiday demand have led to an egg shortage and price surge in the US. Canada's supply management system, with its focus on smaller farms and collaborative risk management, is proving more resilient.
Read more »
Netflix Raises Prices as It Adds Record 19 Million Subscribers in Holiday QuarterThe recent price hike from Netflix is a reminder that subscription costs are a one-way street. They only go higher, which means you need to periodically review them. The standard plan with ads jumps by $2 to $7.99, while the standard plan sans ads goes up $2.50 to $18.99 and the premium plan goes up $3 to $23.99. The author suggests cancelling unused subscriptions as a way to save money.
Read more »