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Arabica coffee prices supported by tight supplies,Robusta fall to a 1-week low

Coffee prices on Tuesday settled mixed, with robusta falling to a 1-week low.  Tight arabica supplies are bullish for arabica prices after ICE-monitored arabica coffee inventories Tuesday fell to a 23-year low of 449,775 bags.

Arabica coffee on Tuesday closed up +0.55 (+0.25%), and Robusta coffee closed down -24 (-1.09%).

Gains in coffee prices Tuesday were limited by abundant rain in Brazil that may promote flowering for next year’s coffee crop.  Somar Meteorologia reported Monday that Minas Gerais had 28.3 mm of rain last week, or 132% of the historical average.  Minas Gerais accounts for about 30% of Brazil’s arabica crop.

Coffee harvest pressures in Brazil are a near-term bearish factor for coffee prices.  Cooxupe cooperative, one of Brazil’s biggest coffee producers, reported last Wednesday that Brazil’s coffee harvest was 99.4% completed as of Sep 16.  Coffee producer sales typically increase during harvest time to make space for storing their newly-picked crops.

Robusta coffee is under pressure on robust supplies from Vietnam after Vietnam’s General Department of Customs reported Sep 7 that Vietnam’s coffee exports in the eight months through Aug rose +15.3% y/y to 1.25 million metric tons.  Vietnam is the world’s biggest producer of robusta coffee beans.  The USDA June 7 revised its 2021-22 coffee production estimate for Vietnam upward to 31.58 million bags from 31.1 million bags but said 2022/23 production would fall by -2.2% y/y to 30.9 million bags.

Also read  Robusta coffee closed down after hitting a new four-year high