Coffee futures markets have recorded four consecutive sessions of gains, with prices in New York and London reaching multi-week highs on June 16. The upward trend is being driven by market anxiety over adverse weather in Brazil, where heavy, off-season rainfall is disrupting the ongoing coffee harvest and raising concerns about crop quality.
On the Intercontinental Exchange (ICE), the Arabica contract for September delivery gained 2.3% to close at 259.20 cents per pound, its highest point in two weeks. The Robusta contract for September also saw a modest gain, settling at $3,529 per tonne. The market movement coincides with recent data from the Commitment of Traders report, which showed the non-commercial speculative sector shifting to a net short position, indicating changing sentiment among investors.
The primary concern is the impact of the rain, potentially an early effect of the El Niño phenomenon, on Brazil's coffee-producing regions. Field reports from areas like South Minas Gerais indicate that harvesting has been halted. Agronomists warn that excessive humidity not only causes ripe cherries to fall, which degrades their quality, but also creates ideal conditions for fungal diseases. The application of fungicides is not feasible while harvesting is underway, compounding the risk to the crop as weather models forecast continued rainfall.