Coffee futures experienced another sharp rally on Thursday, July 9, recovering most of the losses from a two-day slide earlier in the week. Prices on both the New York and London exchanges saw significant double-digit and high single-digit percentage gains, respectively, signaling persistent volatility in the global coffee market.
The September Arabica contract on the Intercontinental Exchange (ICE) in New York climbed 12.3%, or 38.10 cents, to close at 347.90 cents per pound. In London, the September Robusta contract increased by 8.1%, or $302, to settle at $4,043 per metric ton. Both contracts ended the day just below the multi-year highs reached at the start of the week, with the New York market trading near the $3.50 per pound mark.
The price surge is attributed to a mix of technical and fundamental factors. According to market analysis, recent data showed speculative funds significantly increasing their net-long positions. This move, combined with the exchange raising margin requirements earlier in the week which reduced liquidity, reportedly prompted a new wave of buying. Underlying support for prices continues to stem from fundamental concerns, including forecasts for rain in Brazil that could disrupt the ongoing harvest and the potential market impact of the developing El Niño weather pattern.