Onome Amuge
Coffee prices fell on Tuesday as results from JDE Peets, the world’s largest coffee company brought investors to the realisation that demand is still well below pre-pandemic levels.
May arabica coffee was down 0.2 per cent to $1.2885 per lb, having previously dropped to a two-week low of $1.2800 on Monday.
Similarly, May robusta coffee stumbled 1 per cent to $1,347 a tonne after touching a one-month low of $1,335 in the previous session.
Prior to the recent fall in the price of coffee, Netherlands based JDE Peet’s reported a 4.2 per cent decline in annual sales as reduction in cafe sales outweighed a rise in home-use products leading to a fall-out in shares as investors lost focus on the outlook.
Fabien Simon, the company’s chief executive officer said it will probably take 18-24 months for the out-of-home market to return to pre-pandemic levels.
However, dealers noted that coffee prices have been recovering this year against worries of cold weather forecasts over the coming crop in Brazil, the world’s leading producer and exporter.
Meanwhile, sugar is also on a downward slide following a drop in the value of the Brazilian real compared to the U.S dollar, forcing exporters to sell by raising returns in local currency terms.
As a result, May raw sugar went down 0.6 per cent to 16.11 cents per lb while May white sugar shed 0.4 per cent to $458.30 a tonne.
According to reports, Brazil’s currency on Tuesday tumbled to its weakest against the dollar while markets reacted negatively to political occurrences in the South American country.
Dealers are however optimistic that sugar is unlikely to collapse because of weakness of the real, while concerns over near-term supply tightness persists, an indication of a rise in sugar prices in the coming weeks.
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