In the latest trading session, the futures markets for Arabica and Robusta coffee showed divergent trends. The New York ‘C’ contract for Arabica coffee ended a three-day winning streak, closing lower on July 2 ahead of a long holiday weekend in the United States. In contrast, London futures for Robusta coffee posted another marginal gain, reaching their highest price point since mid-February.
The September Arabica contract fell by 870 points, or 2.8%, to settle at 301.20 cents per pound. This pullback followed a significant rally where prices had climbed over 13%, or 36 cents, in the preceding three sessions. Despite the drop, Arabica remains up 25% from its low on June 9. Meanwhile, the September Robusta contract in London gained 0.3% to close at $3,783 per metric ton, having risen 17.1% since its own June 9 low.
Several factors are influencing market dynamics. The dip in Arabica is attributed partly to profit-taking by traders. However, underlying support for higher prices remains due to unseasonal rains in Brazil's key growing regions, which are hampering harvesting and raising concerns about bean quality. Analysts also note that well-capitalized producers are reportedly holding back supply, anticipating more profitable prices. Looking ahead, the market is beginning to factor in the potential effects of the El Niño weather phenomenon, which could negatively impact crops in Central America and Asia in the coming seasons.