Alex von Stachelkopf
The market of coffee has just seen a price collapse. The thing is that the market is oversupplied with Arabica. At the same time, the next harvesting season is expected to bring record-breaking yields in terms of coffee production.
Let’s have a closer look at the current situation and prospects:
The coffee futures contract for December delivery has just break above the local low - 113.2 cents per pound. The reason for another was a weather improvement in Brazil. The rains are crucial for coffee plants during the blossom period. Apart from that, the list of bearish factors include:
More positive forecast for the Columbian yield (it will make up for the possible decline in all other coffee-growing regions).
More positive situation in Vietnam . The harvesting campaign is underway.
The currencies of all the coffee-growing countries are weaker than before, which makes exports cheaper.
At the same time, the following factors are supporting the international market of coffee:
Better demand for Robusta.
Lower supplies from Vietnam .
Diseased coffee plants in Central America.
Seasonality – higher coffee consumption in autumn and winter.
Alex von Stachelkopf
