Arabica futures halt their rally, whilst Robusta climbs even higher
MILAN – The upward trend in Arabica futures has come to a halt in the last trading session ahead of the long weekend of 4 July. New York therefore closed lower after three consecutive sessions of gains, during which the main contract (September) had risen by over 36 cents (+13.4%), closing at 309.90 cents in the mid-week session – its highest level since the third week of March.
In yesterday’s session, the ‘C’ contract thus returned to negative territory, driven by initial profit-taking: the benchmark fell by 870 points (-2.8%) to 301.20 cents, still above the $3 mark.
London futures (September) recorded another positive session, gaining marginally (+0.3%) to close at $3,783, their highest level since mid-February.
Soft commodities have staged a strong recovery over the past few weeks
September arabica coffee futures have risen by 25% from the low of 240.90 cents recorded on 9 June. September ICE robusta coffee meanwhile, has gained 17.1% from the low of $3,230 reached on the same date.
Cocoa has risen by around a third, and raw sugar by 10 per cent. Unseasonal rains in Brazil have played a significant role in this. Rainfall in the coffee belt has, in fact, hampered access for workers and machinery to plantations in key regions of Minas Gerais.
Wet conditions also jeopardise the quality of the beans and heighten fears of reduced availability of high-quality washed Arabica in the coming months. At the same time, the rain has slowed down and complicated the sugarcane harvest, with consequences that are already beginning to be felt on the markets.
Turning back to Arabica coffee, many analysts note that a further factor contributing to the rally in recent weeks is ‘producer behaviour’. After two years of historically high prices, growers are well-capitalised and in no hurry to sell; they can therefore wait for prices to rise to levels considered more profitable.
Meanwhile, the markets are already closely monitoring the potential effects of the El Niño phenomenon
As noted in an analysis by Hedgepoint Global Markets, the effects of El Niño on coffee production vary depending on the intensity of the phenomenon, its duration and the time of year it occurs, as well as the specific climatic conditions of each production area.
The impact may therefore differ depending on the region and the harvest periods. As far as Brazil is concerned, the 2026/27 crop is not expected to be directly affected by the phenomenon.
The situation is different for 2027/28, should the rainfall pattern be altered during the flowering period, in early southern spring.
Outside Brazil, the risks are expected to be greater. According to the analysis, the main production areas in Central America and Asia could be adversely affected by El Niño over the coming harvest seasons, a fact that the markets are already beginning to factor in.
