Arabica coffee prices fell on supply concerns, while cocoa futures increased after hitting a four-month low. Brazilian traders have filed for bankruptcy protection amid weather-related challenges. Sugar futures remained stable, with some indications of Chinese interest in buying. The agricultural commodities market remains influenced by climatic conditions and inflationary pressures.
On Thursday, Arabica coffee futures on the Intercontinental Exchange (ICE) decreased by 2.4% to $4.0005 per pound, following a robust gain of 2.9% the previous day. The fluctuations in price are driven by ongoing supply concerns in Brazil, the leading coffee producer, which has faced hot and dry weather. Fortunately, forecasts now indicate some upcoming rainfall.
Brazilian coffee traders, namely Atlantica and Cafebras, have initiated a court request for bankruptcy protection, seeking to restructure approximately 2.12 billion reais (or $368.5 million) in debt. While this news could have impacted the market, it has largely been anticipated since it was previously discussed last year.
In the robusta coffee market, prices fell by 1.1% to $5,594 per metric ton. Meanwhile, domestic robusta prices in Vietnam have increased following the global price rise on ICE, as farmers in both Brazil and Vietnam are holding out for improved pricing. Notably, Vietnam reported coffee exports of 303,000 metric tons for January and February, representing a 23.5% decline compared to the same period last year.
In the cocoa market, New York cocoa futures increased by 2.1% to $8,238 per metric ton, recovering from a recent four-month low of $7,770 recorded on Tuesday. The Swiss chocolate maker, Lindt & Spruengli, has been downgraded by Baader Helvea from “add” to “reduce” due to valuation issues and uncertainty regarding future outlooks. J.P. Morgan has pointed out that Lindt is likely to experience both volume and margin pressures due to material inflation, anticipated to lead to price increases of approximately 10% over the ensuing year.
Cocoa has recently faced pressure as elevated prices raise concerns over declining chocolate consumption. In London, cocoa prices rose by 1.7% to 6,477 pounds per ton.
Meanwhile, the raw sugar futures market remained stable, with prices holding at 18.20 cents per pound. Some short covering has supported sugar prices following a decline to 1.5-month lows, with speculation regarding potential Chinese buying, albeit without confirmation. An official report has outlined China’s plans to expand oilseed crop cultivation while stabilizing its sugar crop, cotton, and natural rubber production. In contrast, white sugar prices fell by 0.8% to $518.10 per ton.
In conclusion, Arabica coffee prices have seen volatility due to supply concerns in Brazil, while cocoa prices have recovered from lows amid market adjustments. Brazil’s coffee traders are restructuring debts amidst ongoing weather challenges affecting production. Additionally, sugar markets are stable, but inflationary pressures may affect overall profitability in the commodities sector, particularly for chocolate manufacturers. These trends underscore the complexities within agricultural production and global market dynamics.
Original Source: www.tradingview.com
