Coffee and Cocoa Futures Drop on Supply Outlook

Coffee and cocoa traders are watching falling futures prices closely as new data points to stronger global supplies. This week saw sharp declines in key commodities, driven by updated harvest expectations and oversupply concerns. If you're tracking specialty coffee costs or just curious how global markets affect your cup, here’s what moved and why.

In short: ICE December arabica coffee futures dropped 2.2% to $1.9805 per pound, while December cocoa futures fell nearly 1% to $3,102 per ton—marking their lowest weekly close since 2013. Analysts cite higher production forecasts in Brazil and Vietnam as key reasons behind the slide.

Why Cocoa Futures Hit a 2013 Low

ICE December cocoa futures hit a more than one-month low of $3,094 per ton before settling at $3,102, down $30 (0.96%). That decline capped a brutal week: the contract closed 4% lower, extending its retreat from a three-year high. The London-based Liffe December cocoa contract also fell, closing down 11 British pence (0.6%) at £1,983 per ton. The moves reflect growing expectations of surplus supply in the cocoa market.

Arabica Coffee Prices Fall on Brazil Output Boost

December arabica coffee on ICE dropped 4.4 cents (2.2%) to $1.9805 per pound. The fall came after Volcafe, a leading coffee consultancy, slightly raised its forecast for Brazil’s 2014/15 coffee bean production. That revision added downward pressure to prices already sensitive to supply signals. Meanwhile, November robusta coffee on Liffe slipped $12 (0.6%) to $2,079 per ton. Vietnam, the top robusta grower, is now expected to produce 28.5 million bags in 2014/15—down from 30 million bags the previous season, according to Volcafe.

Sugar Futures Extend Losses to Six Weeks

The October ICE raw sugar contract hit a seven-month low of 15.00 cents per pound, closing down 0.13 cents (0.9%). That decline marked the sixth straight weekly loss. In London, the October white sugar contract dropped $1.70 (0.4%) to $415.90 per ton. Both contracts saw increased volume as traders positioned ahead of expiration and reacted to ongoing oversupply in the sugar market.

What Determines Coffee and Cocoa Futures Prices?

Futures prices for coffee and cocoa are primarily influenced by global production forecasts, weather conditions, and inventory levels. In the case of arabica, Brazil’s role as the largest producer means that even small revisions to its expected output can shift market sentiment. For cocoa, concerns over West African supply—and now rising production estimates—shape price trends. Sugar is additionally affected by biofuel demand and currency shifts, though supply glut remains the dominant factor.

Frequently Asked Questions

Why did ICE cocoa futures fall to a 2013 low this week?

ICE December cocoa futures dropped to $3,102 per ton, down nearly 1% for the week, marking their lowest point since June 2013. The decline was driven by mounting expectations of a global cocoa supply surplus.

How much did arabica coffee futures drop this week?

ICE December arabica coffee futures fell 4.4 cents (2.2%) to $1.9805 per pound. The drop followed a slight upward revision in Brazil’s 2014/15 coffee production forecast by Volcafe.

What’s the latest production estimate for Brazilian coffee in 2014/15?

Volcafe raised its forecast for Brazil’s 2014/15 coffee bean production, contributing to a bearish outlook for arabica coffee prices. Though the exact new figure wasn’t provided, the revision confirmed higher expected output from the world’s largest producer.

How did robusta coffee prices perform this week?

Liffe November robusta coffee futures fell $12 (0.6%) to $2,079 per ton. Volcafe also expects Vietnam’s 2014/15 robusta production to drop to 28.5 million bags from 30 million in the prior season.

Why are sugar futures at seven-month lows?

October ICE raw sugar futures fell to 15.00 cents per pound, their lowest in seven months, and closed down 0.9%. The October white sugar contract also declined, ending at $415.90 per ton. Both contracts suffered six consecutive weeks of losses due to oversupply.

Which coffee and cocoa contracts were most affected this week?

The December contracts for both ICE arabica coffee and cocoa saw the sharpest moves, with cocoa hitting a more than one-month low and coffee reaching a four percent weekly decline. London’s Liffe robusta and cocoa contracts also posted notable losses.

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