Arabica Coffee Tumbles to Cap Biggest Weekly Loss Since July
Coffee Heads for First Weekly Loss Since October as Softs Fall
(Bloomberg) -- Arabica coffee futures slumped to cap the biggest weekly loss since July, easing pressure on buyers who are paying the highest prices in years.
The most-active March arabica contract dropped 3.2% to $2.326 a pound in New York on Friday, retreating from a decade high reached on Monday and marking the first weekly decline since Oct. 22. The futures ended down 4.4% for the week, bringing this year’s gain to 81%. Shipments from top exporter Brazil declined 37% in November from a year earlier, while second-ranked Colombia also saw exports and output tumble.
Droughts and frosts this year severely damaged Brazilian farms and also eroded yield potential for two more years. Traders are watching to see how big an impact the weather and a worldwide shipping malaise will have on the global market while monitoring producer responses to the better prices.
Profit taking is hitting coffee after reaching a decade high, Ole Hansen, commodity strategist for Saxo Bank A/S said Friday in emailed note.
Prices of most agricultural commodities are expected to fall next year, albeit remaining at relatively elevated levels, according to analysts at Fitch Solutions.
“We think that global agricultural production will increase over the coming year owing to high plantings incentivized by high prevailing prices for much of 2021, but also because the weather has been more favorable,” the analysts said in a Thursday note.
In other soft commodities, raw sugar rose in New York to cap the biggest weekly rally since mid-August.
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