Onome Amuge
Arabica coffee futures continued its downward trend on the Intercontinental Exchange (ICE), with the market falling by more than 30 percent since late August, partly due to an improving outlook for Brazil’s 2023 harvest and the expectation of higher ICE-certified arabica stocks.
March arabica coffee was down 1.25 cents, or 0.8 percent, at $1.551 per lb. The contract also hit its lowest price in 16 months during the week at $1.5675 per pound. January robusta coffee also suffered a similar fate, losing $7, or 0.4 percent, to $1,811 a tonne. Data from the Commodity Futures Trading Commission (CFTC) also showed funds increased their bearish bets in Arabica following recent developments.
Commenting on the overall bearish trend, a coffee broker said, “It’s complicated to digest a super oversold market that keeps adding more and more, even if it’s not led by origins.”
He added that selling from farmers has been minimal as speculations continued to dominate the market.
On the other hand, sugar futures recorded bullish results as March raw sugar gained 1.6 percent to 20.05 cents per lb, climbing back towards a seven-month peak of 20.48 cents set on Wednesday. The contract also gained 2 percent in the week. March white sugar also rose 1.9 percent at $543.30 a tonne, but the contract lost 4 percent in the week.
Dealers said the market was supported partly by a recovery in Brazil’s real currency as the incoming government sought to assuage fears about fiscal spending. Speculators also added more than 70,000 lots to their long position in raw sugar.
Cocoa futures also traded in bullish territory as March New York cocoa rose $9, or 0.4 percent, to $2,456 a tonne, while March London cocoa was up 6 pounds, or 0.3 percent, to 1,953 pounds per tonne.
Dealers said the market remained underpinned by concern about the potential disruption of the flow of beans from top growers Ivory Coast and Ghana with a Nov. 20 deadline for buyers to factor in a living income differential.
Fitch Solutions explained in a note that the cocoa price rally remains supported by various supply concerns, including uncertainty over Ivory Coast exports.
