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Coffee Prices Rebound from early losses

Coffee prices this morning recovered from early losses and are moderately higher.  Fears about a shortage of fertilizer supplies in Brazil have sparked short-covering in coffee futures today.  Russia and Belarus are two of the world’s biggest exporters of potash and other soil nutrients, and there is concern that sanctions against both countries could lead to a shortage of soil nutrients for Brazil’s farmers.  Brazil imports 80% of the fertilizer it uses.

May arabica coffee settled up 1.35 cent, or 0.6%, at $2.2425 per lb after dipping to a 3-1/2-month low of $2.2045. The contract lost 4.8% in the week.

May robusta coffee rose $25, or 1.2%, to $2,038 a tonne.

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Coffee is under pressure from fears that any global economic downturn linked to the Ukraine crisis could curb demand. There are also worries that sales to major buyer Russia could slow as sanctions bite.

Dealers also noted that some speculators, which hold a large long position in coffee, liquidated contracts to move to assets with higher potential for gains.

Coffee prices have been under pressure this week, with arabica sliding to a 2-month low today and robusta dropping to a 1-month low Thursday.  Coffee prices are under pressure on concern Russia’s invasion of Ukraine will lead to a surge in energy prices that derails the global economy. 

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