Arabica Coffee 4/5 May '11 (XFK11)
Arabica Coffee 4/5 Futures Market News and Commentary
July arabica coffee (KCN26) on Wednesday closed unchanged, and July ICE robusta coffee (RMN26) closed down -39 (-1.12%).
Coffee prices settled mixed on Wednesday, pressured by a stronger dollar. Losses in arabica coffee were limited amid a decline in coffee inventories after ICE arabica coffee inventories fell to a 2-month low of 494,508 bags on Tuesday.
Concerns that a prolonged US-Iran war will keep the Strait of Hormuz closed and disrupt global coffee supplies are supportive for coffee prices. The closure of the strait has tightened coffee supplies by increasing global shipping rates, insurance, fertilizer, and fuel costs, and raising costs for coffee importers and roasters.
Smaller exports from Brazil are supportive of coffee prices. On April 14, Cecafe reported that Brazil Mar green coffee exports fell -10% y/y to 2.65 million bags. On April 7, Brazil's Trade Ministry reported that Brazil's Mar coffee exports fell -31% y/y to 151,000 MT.
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