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Robusta coffee futures experienced a significant drop on Tuesday 3 December 2024 following a peak at the highest prices in decades last week, according to an XM Group trading report.
The decline was attributed to increased selling activity in Vietnam, the world’s top coffee producer of Robusta, as traders moved to offload stockpiles.
Robusta coffee futures settled at US$4604 per tonne, a $202 decrease (4.2 per cent) following a 10.6 per cent drop on Monday 2 December.
The contracts had reached $5694 per tonne on Friday 29 November, the highest price since 1977, according to the International Coffee Organization’s (ICO) price index. Traders noted a surge in coffee flows from Vietnam’s upcountry regions as local middlemen took advantage of price weakness and unloaded their stock.
Meanwhile, Arabica coffee futures also saw a decline, falling 0.2 per cent to $2.955 per pound, following a 6.9 per cent drop on Monday. The contract had reached its highest level since 1977 on Friday, hitting $3.3545.
According to the report, the overall pressure on coffee prices was compounded by a weak Brazilian real, which is nearing all-time lows against the dollar. This has prompted Brazilian exporters to sell coffee at favourable exchange rates, increasing supply and further weighing on market prices.
The fungibility of Robusta and Arabica coffee means that an increase in supply from one type often puts downward pressure on the prices of both.
The post Coffee futures decline after reaching decades-high prices appeared first on Global Coffee Report.
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