On Wednesday, the US coffee futures declined due to good weather in Brazil as rising exchange stocks continuously weighed down on prices.
It fell by -5.25% to $142.98 per metric ton on January 11. Likewise, March arabica coffee decreased by 4.70% to $1.44 per pound, its weakest level since May 2021.
Moreover, dealers said that rains and future showers increased the outlook for arabica crops within the world’s top producer, Brazil.
Analysts stated that the rains would support cherry growth and improve soil moisture.
Likewise, overflowing supplies of coffee are weakening its prices.
Equally important, arabica coffee dropped to its 20-month nearest-futures low while robusta dipped to a one-week low.
On December 15, Brasilia production estimates in 2022 were heightened to 50.90 million bags from a 50.40 million bag forecast.
Also, US green coffee inventories were abundant after they rose by 1.10% month-on-month and 9.40% year-on-year to 6.39 million bags.
Besides, the United States Department of Agriculture reported cutting the global 2022/23 coffee production estimate by -1.30% to 172.80 million bags.
In addition, the International Coffee Organization (ICO) reported that global exports lowered by -1.90% year-on-year to 9.87 million bags in October. Whereas, experts stated in November that the nation’s October green coffee exports reduced by 2.90% YoY to 3.18 million bags.
Anti-Deforestation Law Subject to Protect Crops
The EU Anti-Deforestation law requires companies to gather exact geographic coordinates where their commodities are planted.
This law currently reaches out to various agricultural products, from beef to coffee and wood. In addition, it includes goods that come from these harvests, such as furniture and leather.
Furthermore, European lawmakers expanded the coverage of the commodities protected by the law to include palm-oil derivatives, rubber, paper, and charcoal. Still, corn and biodiesel are not included.
Before legislators passed the law, Indonesia and Brazil spread a letter signed by 14 major commodity-producing nations.
Meanwhile, global prices for food commodities reached a record high in 2022 due to Russia’s war with Ukraine.