Increase in Robusta and Arabica Coffee Prices Amid Expectations of Supply Improvement

The ICE Robusta coffee futures contracts saw a significant increase of nearly 2% this Friday, ending the week with an impressive 11% jump due to speculative buying. This bullish movement reflects a market behavior that responds quickly to profit opportunities, even amid uncertainty about the sustainability of this trend. Analysts point out that although prices have risen considerably, the expected improvement in supplies may put downward pressure on prices in the future.

Rabobank indicated that the signals for Robusta prices are becoming bearish. The institution highlighted the increase in Robusta stocks on ICE, the significant recovery in production expected in Indonesia, and more favorable weather forecasts in Vietnam, the world's largest Robusta producer. These conditions suggest an increase in supply, which could mitigate the upward price pressure observed over the past week. The recovery of stocks and favorable weather conditions are factors that could stabilize or even reduce Robusta prices in the medium term.

Meanwhile, the slow harvest of the Arabica coffee crop in Brazil and reports of smaller beans contribute to the price appreciation. Experts note that the combination of a delayed harvest and smaller bean sizes could impact the quantity and quality of supply, sustaining high Arabica prices. Thus, the coffee market remains dynamic, with climatic and production variables influencing price and supply expectations.

Source: Investing.com