Arabica coffee futures on the New York market experienced a strong rally during the first week of August, driven by a weakening US dollar and historically low certified stock levels. The price surge culminated on Friday, August 7, with the September contract showing significant gains as market participants reacted to tightening physical supply indicators.
The September ICE Arabica contract closed the week at 335.55 cents per pound, a 4.3% increase, while certified stocks dropped to 244,172 bags, their lowest level in over two years. In contrast, the London market for Robusta coffee followed a less aggressive path, with its September contract ending the week at $3,787 per tonne after reaching a mid-week high.
Beyond market mechanics, supply-side anxieties are fueling the volatility. In Brazil, heavy rainfall has delayed the current harvest and raised concerns about the quality of the incoming crop, with reports suggesting producers are hesitant to sell. Adding to this uncertainty is the growing forecast for a powerful El Niño event, which could disrupt weather patterns, potentially causing drought in key growing regions and delaying the critical flowering stage for Brazil's 2027/28 crop.