• Arabica coffee rose 1.0% on the week in New York, closing at US₵ 185.20/lb
• On the London exchange, Robusta coffee gained 4.9% to USD 3,297/t
• Cepea indicator for Arabica coffee up 2.2%
• Cepea indicator for Robusta coffee up 3.9% to R$ 878.38/bag
• Dollar Index down 1.1% to 102.63 points
• USDBRL rose 0.5% to 4.98
• Robusta coffee differentials widened to +800 in Vietnam and +700 in Indonesia
• Financial flow in soft commodities up USD 177 million on the week
• Latest COT/CFTC report showed an increase in funds' long positions
• Cecafé confirms growth in Brazilian exports in February
• Shipments of Arabica coffee up 36.5%, while Robusta grew 552%.
• Brazil's average differentials close February indicating strong competitiveness
Last week, Robusta coffee futures rose amid lower supplies of the variety in Asia, reaching a new all-time high and contributing to the gains seen for Arabica coffee in New York. The limited supply of Robusta coffee in Asia, especially in Vietnam, was the main factor supporting coffee prices during the week. In addition to the 20% drop in exports from the country in the last month, price differentials remain high, with offers above USD +800/t, which reflects the scenario of restricted supply in the country; this scenario is also repeated in Indonesia, with price differentials around USD +700/t. In addition, part of the increase was due to the greater appetite of speculative agents and technical factors.
In New York, the most active contract, maturing in May, ended the week with gains of 190 points (1.0%), closing Friday (08) quoted at US₵ 185.20/lb. In London, futures prices for Robusta coffee rose by USD 154/t (4.9%), closing Friday (08) at USD 3,297/t; on Thursday (07) the most active contract, for May, closed at USD 3,381/t, an all-time high for the current contract in London. In the period, the Dollar Index fell 1.1% to 102.63 points and the USDBRL pair gained 0.5% to USDBRL 4.98.
Weekly intraday (most active contract) - March 04 to March 08
Following the movements seen abroad, the prices of both Arabica and Robusta coffee also ended the week higher on the Brazilian domestic market. The Cepea indicator for Arabica rose by 2.2% in the period, closing the week at R$ 1018.32/bag. Robusta coffee prices saw an even sharper increase, with the Cepea indicator for the variety rising by 3.9% over the week, closing Friday (08) at R$878.38/bag.
Part of the week's advances were due to the greater appetite of speculative agents for commodity contracts, including coffee. The StoneX Commodity Tracker indicated that last week there was an increase of USD 177 million in the financial flow of the soft commodities group, which includes coffee, cocoa, cotton and sugar. Also according to the indicator, the flow recorded on Friday (08), which totaled 19.7 billion dollars, represented an increase of USD 1.9 billion compared to the same period last year.
The COT/CFTC report, which showed agents' positions on Tuesday (05), indicated an increase in funds' net long positions compared to the previous Tuesday. For New York, the report indicated that funds increased their net long position by 516 contracts, to 32,642 net long contracts. Index funds also extended their long position by 1,626 contracts, for a net long total of 52,035 contracts on Tuesday (05). In London, the COT futures and options report showed that funds extended their net long position by 2,730 contracts, ending the period with a net long balance of 41,241 contracts.
Data from Cecafé, released Monday afternoon (11), confirmed the predictions indicated by ComexStat last week of a strong increase in Brazilian exports. Cecafé reported that shipments of green coffee in February totaled 3.38 million bags, an increase of 57.5% compared to the same month in 2023, when 2.14 million were shipped. Instant coffee registered a 14.2% reduction in shipments, totaling 249,000 bags sent abroad.
Brazilian green coffee exports (million bags)
Arabica coffee was responsible for 2.81 million bags shipped, an increase of 36.5% compared to February last year, but 1.6% below the average for the month in the last three years. In the crop year (Jul/23 – Jun/24) Arabica has so far accumulated 23.3 million bags exported, exceeding the same period in the 2022/23 crop year by 9.6%. Robusta coffee followed the expected trend of strong shipments, and saw 570,000 bags exported in February, an annual increase of 552%, against 87,000 registered in Feb/23. In total, 5 million bags of Robusta have already been exported this crop year, exceeding by 472% the same period last season, when 874,000 bags were exported.
Brazilian Robusta exports ('000 bags)
As we have mentioned, amid crop and logistical problems in both Vietnam and Indonesia, prices have been boosted on the international market, and therefore, the differences between Robusta in Brazil have proven to be much more favorable to exports than their Asian competitors, which has led to a greater participation of Brazilian Robusta on the international market. Looking at February consolidated figures in the graph, we can see that the average Brazilian differential fell even further in February, remaining below USD 450/t in the month, while the differentials in both Vietnam and Indonesia have remained high, indicating significantly higher prices in these origins.
