(Bloomberg) — Arabica futures declined by the most this month after hitting a two-year high last week on concerns over Brazilian production.
The most-active arabica contract fell as much as 3.4% in New York, the biggest intraday drop in two weeks. Prices are cooling after last week’s jump to the highest price since February 2022.
Lower producer and consumer inventories over the past few years will require a sizable Brazil crop this year “to fuel domestic demand as well as exports to consumer markets for the next 12-month seasonal coffee year,” Michael McDougall, managing director at Paragon Global Markets, said in a note. Key export ports in Brazil also continue to report limited container and vessel availability and shipping route alterations, leading to shipment delays, he wrote.
In other softs, cocoa futures rose in New York, paring earlier losses of as much as 4.1%. Good weather in some key growing areas in West Africa has raised expectations for crop prospects in the next season.
Still, prices have doubled this year as poor harvests in top-producing nations have left the world facing a huge shortage. Futures are holding the uptrend that began at the start of this month because of persistent concerns about long-term supply issues and renewed political uncertainty in Ivory Coast, McDougall said.
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