On Tuesday, coffee prices were moderately higher amid a weaker dollar, and the beans’ inventories were tighter due to heavy rains.
Coffee futures for July delivery went up by 0.46% to $186.45 per metric ton on May 02’s Asian afternoon session.
The robusta commodity gained support from heavy rain that could reduce yields in Indonesia. Besides, the country is the third top robusta producer.
Furthermore, the global demand for beans increased as roasters and consumers sought cheaper options.
Due to excessive rains in Brazil, arabica coffee was supported since farmers stayed out of the fields, delaying harvest. Somar Meteorologia said on Monday that the Minas Gerais region received 38.90 mm of rain. As a result, the region is accountable for 30.00% of the arabica crop.
Also, coffee prices benefited from the odds of an El Niño weather event increase, which can affect global production. According to the US Climate Prediction Center, the weather pattern could emerge between August and October. It can bring damaging rains to Brazil and drought in India, pressuring crop production if it occurs.
In addition, robusta gained advantages after traders forecasted the market to have a record deficit of 5.60 million bags. Based on experts, Indonesia would have a drop in the 2023 coffee output amid heavy rainfalls.
Costa Rica Coffee Exports Declined
According to the report from ICAFE on Tuesday, Costa Rica’s coffee exports will slide by 20.50% in April. Logistical problems mainly caused the weaker shipments.
ICAFE announced that April deliveries came at 117,934 60-kilogram bags. The figure is 30,000 bags less compared to last year.
Based on experts, it was pointed out that the shortage of containers led to a slowdown in coffee exports. They added that several ships had suspended arrivals and halted dry product loads to focus on refrigerated goods.
Shipments in the first seven months of the 2022/23 harvesting season had 484,861 bags. It is down by 8.00% compared to the same period in the 2021/2022 season.
