LONDON, March 27 — Arabica coffee futures traded on the ICE exchange reached their lowest point in a month on Thursday, as concerns grew over a potential drop in consumption due to high prices.
Arabica coffee prices fell by 2.9%, reaching $3.8070 per pound at 1548 GMT, the lowest level since late February, when prices hit $3.7560.
Market Focus Shifts to Brazil’s Weather and Consumer Sentiment
Broker and consultant Michael J. Nugent stated that market participants remain focused on weather conditions in Brazil, which are crucial for shaping the upcoming coffee crop and replenishing global stockpiles. However, he expressed concerns that record-high prices might clash with weakening consumer confidence.
Leading coffee roasters like Nestle and JDE Peet’s (maker of Douwe Egberts) are in discussions with retailers about passing on the costs resulting from nearly doubling arabica prices over the past year.
Reg Watson, director of equity research at Dutch Bank ING, predicts that coffee prices could rise by 15% to 25% in retail markets, potentially causing a sharp increase for consumers in some regions.
Brazil’s Weather and Global Supply Impact
In Brazil, showers and thunderstorms are expected to continue intermittently over the next 10 days, though rainfall in coffee-growing areas will remain light.
Meanwhile, robusta coffee futures fell 1.6%, reaching $5,357 per metric ton, hitting their lowest point in a month at $5,280. The supply of robusta beans has tightened in Vietnam and Indonesia, the top two robusta producers, as Vietnamese farmers hold off on selling in anticipation of higher profits.
Other Commodities
Sugar Prices Fall
Raw sugar dropped 1.6% to 19.06 cents per pound.
Sugar cane crushing in Brazil’s center-south region declined by nearly 18% in the first half of March, while sugar production fell 19%, according to industry group Unica.
A fire at Brazil’s Sao Martinho’s Iracema plant has caused a shutdown of a boiler, which could reduce daily ethanol and sugar production by up to 30% for the 2025-2026 harvest.
Cocoa Prices Struggle Amid Weaker Demand
London cocoa futures fell by 0.9% to $6,201 per ton, following a 1.1% increase on Wednesday.
Cocoa prices are supported by an expected decline in the mid-crop from the Ivory Coast, the top cocoa producer. However, concerns over weakening demand due to high prices have capped potential gains.
New York cocoa futures slipped 0.2%, settling at $8,033 per ton. The market awaits new developments to guide further trading.
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