How long will prices remain high?
Recently, the Coffee C price, which represents Arabica coffee futures traded on the Intercontinental Exchange (ICE), has experienced a steady climb to a 6 month high with fluctuations influenced by various factors. This year’s El Nino weather event is creating a bullish platform for coffee prices. An El Nino pattern typically brings heavy rains to Brazil and drought to India, negatively impacting coffee crop production. Right now the current price movements can largely be attributed to a heat wave in Vietnam affecting Robusta coffee production and as a result, providing carryover support for premium Arabica beans.
This is accentuated by Arabica coffee prices supported by reports that recent heavy rain in Brazil’s coffee-growing regions may have damaged coffee crops. Somar Meteorologia reported on Monday that Brazil’s Minas Gerais region received 75.4 mm of rainfall in the past week, or 335% of the historical average. Minas Gerais accounts for about 30% of Brazil’s arabica crop.
Current reports indicate that support for 1.88 – 2.15 will remain for most of 2024.
Other trends in the Coffee C price might reflect changes in global coffee demand and supply dynamics. Economic indicators and geopolitical events can also contribute to price movements within the coffee market. Monitoring reports from Brazilian financial news sources alongside international commodities news platforms like Bloomberg or Reuters can offer a comprehensive overview of the factors influencing the Coffee C price over the last 45 days. What will affect our market in Australia is the number of contracts traders will have to supply the roasters until a new round of contracts is necessary.
At Minas Hill, we locked in several contracts above our current sales forecast, and our relationship with farmers has guaranteed a certain comfort in our demand vs supply relationship. In my last conversation with farmers and cooperatives, prices will remain high until at least the beginning of the harvest, where production estimates will dictate the market.
If you need coffee immediately or in the near future, talk to us. We will certainly present you with a solution based on real factors and good value for your money.
Marcelo Brussi,
Director