Arabica Coffee Dips 3% This Week as Raw Sugar Falls to 2-Week Low

Arabica coffee futures experienced a slight uptick in trading on the Intercontinental Exchange (ICE) this past Friday, although they recorded a 3% decline for the week. Meanwhile, raw sugar prices fell to their lowest point in two weeks, signaling shifts in the commodities market that investors should note. As various factors impact these markets, let’s delve into the latest developments in coffee, sugar, and cocoa.

Coffee Market Update

Arabica coffee prices rose by 1.15 cents, equivalent to 0.3%, closing at $3.7995 per pound. Despite this minor increase, the overall outlook remains uncertain.
Market experts have observed that recent rainfall in Brazilian coffee-growing regions could positively influence cherry development, although additional precipitation would be beneficial.
Concerns are emerging regarding a potential decline in demand due to rising retail prices. According to a recent analysis by BMI, "We anticipate that Brazil’s tight stock levels will support coffee prices through 2025, but we must also consider that elevated prices could dampen consumer demand."
Good news for traders: approximately 50,000 bags of Arabica coffee are expected to be graded soon, which may boost certified stock levels.
On the other hand, Robusta coffee prices remained steady at $5,354 per metric ton.

Sugar Prices Decline

The market for raw sugar saw a decrease of 0.13 cents, or 0.7%, ending the day at 18.96 cents per pound. This decline brought the commodity to a two-week low of 18.91 cents.
The weekly performance for sugar reflected a 3.8% drop.
Traders noted that the sugar cane crushing activity in Brazil’s Center-South region during the first half of March exceeded expectations, although it still lagged behind last year’s figures.
Additionally, the commencement of more mills in the second half of March is anticipated to alleviate fears of a sluggish start to the 2025/26 season.
The figures show that sugar cane crushing in this region decreased by 18%, totaling 1.83 million tons, with sugar production down by 19%.
White sugar prices also dipped by 0.4%, settling at $535.70 per ton.

Cocoa Market Performance

In contrast, New York cocoa prices increased by $63, or 0.8%, bringing the total to $8,042 per ton, which represents a 4% weekly gain.
Traders are optimistic as the market continues to receive support from anticipated reductions in the mid-crop size from the leading producer, Ivory Coast.
Some analysts speculate that alternatives to cocoa products might outperform similar offerings, such as those in the plant-based sector.
Over in London, cocoa prices rose by 1.5%, reaching 6,259 pounds per ton, marking a 3% increase over the week.

These fluctuations in commodity prices reflect the current dynamics of agricultural markets, influenced by weather patterns, production rates, and consumer demand. Keeping an eye on these trends can provide valuable insights for investors and industry stakeholders alike.