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Price for Arabica Coffee Settled after Breaking Record High Point in 4 years

Price for Arabica Coffee Settled After Breaking Record High Point in 4 years

June 4 - 2021 Coffee Geography Magazine

Concern over the drought in Brazil caused the current Arabica coffee price hike on market hitting a four year high.The market is almost exclusively focused on the upcoming deficit in the 2021/22 crop, and a few other factors exacerbate those concerns: road blocks in Colombia, currency movements, high shipping costs globally and worries about warehouse closures and farmer defaults in Brazil.

Traders work at the Intercontinental Exchange, Inc.

July arabica coffee slipped 0.1% to $1.6090 per lb, after setting a 4-1/2-year high of $1.6675 on Tuesday.

Rabobank mentioned on its monthly report on commodity market that there are huge stocks in Brazil and Vietnam and bulky (ICE exchange) certified stocks. However, funds are taking the market by storm and, in moments of panic, the supply/demand has only a marginal impact on pricing, assuming that fundamentals may become important only when the next Arabica contract (July) approaches delivery and the reality of over 2 million certified bags (of ICE exchange stock) might weigh on the market.

Investors are nervous and inclined to buy given talk that the worst dry spell in 91 years in Brazil is hurting the development of the upcoming 2022/23 crop, with dry weather having already hurt the current crop.

July robusta coffee fell 0.4% to $1,585 a tonne, after setting a 2-1/2-year high of $1,619 on Tuesday.

Indonesia’s Lampung province exported 5,575.50 tonnes of Sumatran robusta coffee beans in May, down nearly 41% year-on-year.

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