Dec arabica coffee (KCZ23) rose by 1.57%, gaining +2.40 to $154.60, while Nov ICE robusta coffee (RMX23) increased by 1.88%, up +46 to $2477. These price surges are attributed to weather concerns in Brazil and Colombia, leading to expectations of decreased rainfall and high temperatures. Brazil and Colombia are the largest arabica coffee producers globally, further influencing market trends.
Robusta coffee supplies remain tight, with ICE-monitored inventories hitting a record low of 3,380 lots. Concurrently, Vietnam’s coffee exports for the first eight months of 2023 decreased 4.9% year-over-year to 1.207 million metric tons. The Colombian Coffee Growers Federation also reported a 17% drop in July coffee exports to 846,000 bags, compounding supply issues.
Rabobank’s updated forecast anticipates a coffee deficit of 6.4 million bags for the 2022/23 market. In contrast, the USDA projects a 2.5% uptick in global coffee production for 2023/24 but warns of a decline in robusta output. The ongoing El Niño phenomenon may further complicate production in Vietnam and Brazil, posing additional risks to coffee supply dynamics.
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