March arabica coffee (KCH23) on Friday closed down -2.75 (-1.62%), and Mar ICE robusta coffee (RMH23) closed down -25 (-1.37%).
Coffee prices Friday extended Thursday's losses, with robusta falling to a 5-week low.  Abundant arabica coffee supplies are weighing on prices.  ICE arabica coffee inventories have risen steadily since falling to a 23-year low of 382,695 bags on Nov 3 and posted a  5-1/2 month high Friday of 814,686 bags.  In addition, increased coffee exports from Vietnam, the largest robusta producer, are weighing on robusta prices after the General Statistics Office of Vietnam reported Wednesday that Vietnam's Jan-Dec coffee exports were up +10.1% y/y at 1.72 MMT.
On the negative side, Conab on Dec 15 raised its 2022 Brazil coffee production estimate to 50.9 mln bags from a 50.4 mln bag estimate in Sep, up +6.7% y/y.
Arabica coffee on Wednesday climbed to a 1-1/2 month high on uncertainty about Brazil's 2023 coffee crop as drier-than-normal conditions in Brazil may curb coffee yields. Â Somar Meteorologia reported Monday that Brazil's Minas Gerais region received 31.7 mm of rain last week, or 72% of the historical average. Â Minas Gerais accounts for about 30% of Brazil's arabica crop.
Robusta has support from ever-tighter coffee inventories as ICE-monitored robusta coffee inventories sank to a 4-1/2 year low Thursday of 6,426 lots.
Coffee prices also have support after the USDA, in its bi-annual report released on Dec 23, cut its global 2022/23 coffee production estimate by -1.3% to 172.8 mln bags from a June estimate of 175.0 mln bags. Â In addition, the USDA cut its 2022/23 global coffee ending stocks estimate by -1.7% to 34.1 mln bags from a June estimate of 34.7 mln bags. Â
The International Coffee Organization (ICO) reported on Dec 2 that global coffee exports in Oct fell -1.9% y/y to 9.87 mln bags. Â Also, the Colombia Coffee Growers Federation reported last Monday that Colombia's Nov coffee exports fell -25% y/y to 854,000 bags. Â Colombia is the world's second-largest producer of arabica beans. Â Meanwhile, Cecafe reported on Nov 17 that Brazil's Oct green coffee exports fell -2.9% y/y to 3.18 mln bags.
In a bullish factor, the USDA's Foreign Agriculture Service (FAS) on Nov 22 cut its Brazil 2022/23 coffee production forecast by -2.6% to 62.6 mln bags from a prior estimate of 64.3 mln bags. Â This year was supposed to be the higher-yielding year of Brazil's biennial coffee crop, but coffee output this year was slashed by drought.
More Coffee News from Barchart
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- Coffee Prices Under Pressure on Abundant Global Supplies
- Coffee Moderately Lower as Supply Concerns Fade
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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