Arabica coffee extends losses to 12-year low

Arabica coffee futures on ICE fell to the lowest in more than 12 years on Monday, pressured by ample global supplies and the weak Brazilian currency.

* December arabica coffee settled down 2.4 cent, or 2.4 percent, at 97.3 cents per lb, after touching the lowest since July 2006 at 97.15 cents.

* Earlier weakness in the Brazilian real against the US dollar was a source of pressure on the market already weighed down by abundant global supplies, traders said.

* A weaker currency in the top grower improves local currency returns on dollar-traded commodities like coffee, encouraging producers to sell more beans.

* “Producers are selling and I think that’s where the more recent weakness has come from,” one dealer said.

* Expectations for a record crop from top grower Brazil also continued to pressure prices, dealers said.

* Technically, the second-position contract neared oversold levels, though speculators were still hesitant to cover short positions in large volume, dealers said.

* Meanwhile, coffee producers are seeking urgent meetings with major customers such as Nestle, Jacobs Douwe Egberts and Starbucks to find ways to shore up prices that have slid to 12-year lows.

* November robusta coffee settled down $10, or 0.7 percent, at $1,479 per tonne.

Also read  Idukki, Wayanad, Palakkad, Thrissur put on yellow alert, heavy rainfall expected over next two days
Read previous post:
Black Pepper Spot Prices 18-Sep-18

Black Pepper Spot Prices 18-Sep-18

Close