RIO DE JANEIRO, BRAZIL – Arabica coffee futures on the Intercontinental Exchange (ICE) closed down nearly 4% on Monday, retreating further from last week’s nearly 7-year high as the damage of a new wave of frost over the weekend in top producer Brazil was considered limited.
Arabica coffee for September delivery closed down 6.75 cents, or 3.8%, at US$1.728 a pound, after retreating 8.6% on Friday in sharp reversal from a peak above US$2 earlier in the week.
The frosts that hit Brazil last Friday and Saturday, the second such weather event to affect the country’s coffee-growing regions in the past fortnight, seemed “less intense and affected a smaller than expected coffee-growing area,” Archer Consulting said in a note.
Traders said there was widespread profit-taking in the market but prices should soon find a floor as Brazil’s next arabica crop will come in at least 10% smaller than initially expected. The worst cold spell to hit Brazil’s arabica regions in nearly 30 years will hurt production for at least the next 2 crops.
Robusta coffee for September closed down US$33, or 1.8%, at US$1,753 a ton.
Sugar
Raw sugar for October delivery closed up 0.04 cents, or 0.2%, at 17.95 cents a pound, still down slightly from last week’s 5-month high of 18.81 cents.
Traders said sugar is strongly supported at current levels amid concerns over the sugarcane crop in top producer Brazil which has been hit by dry weather and frosts this season.
They expect many analysts to lower their production forecasts for Brazil once again, although they have warned that demand remains weak and India wants to sell at current levels.
Sugar speculators on the ICE raised their net long position by 18,754 contracts to 169,913 in the July 27 week.
White sugar for October delivery was up US$1.60, or 0.4%, at US$447.30 a ton.