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On 5 February, Arabica coffee futures reached US$4 per pound in New York for the first time, as concerns mount over global supply outlook.
According to a Bloomberg report, fears have grown about future output in top-grower Brazil after a prolonged drought. Strong exports from the nation earlier in the season are compounding the current strain on supply, and local farmers have sold more of their crop than usual at this point in the year, leaving questions over how much will be left to ship.
“We should still have some additional volatility until the next crop arrives,” says Pavel Cardoso, President of Brazil’s Coffee Industry Association.
There are also worries about output in Vietnam, the largest producer of Robusta, after fields were hit by unfavourable weather. Together, this is expected to pull global stockpiles to a 25-year low, the US Department of Agriculture forecasts.
The most-active Arabica futures contract climbed as much as 4.6 per cent in New York on 5 February, later settling at $3.9775 per pound, up 3.8 per cent from the prior session.
Inventories at exchange-monitored warehouses have been declining. However, a recent increase in the amount of coffee pending grading suggests record prices are attracting more beans to the exchange, according to Rabobank analyst Carlos Mera.
The post Coffee prices reach $4 per pound for the first time appeared first on Global Coffee Report.
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