New York Futures: Arabica coffee plunges to a 13-year low due to oversupply

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New YORK / London (Reuters)-ICE Arabica coffee futures tumbled on Tuesday as global oversupply dragged monthly contracts to their lowest level in more than 13 years.

May Arabica coffee futures closed down 1.2 cents, or 1.2%, at 96 cents a pound, falling to 94.65 cents at one point in intraday trading, the lowest for the second month since December 2005.

Traders focused on support at recent lows in recent months, with a low of 93.55 cents hit in February and a low of 92 cents hit in September last year.

Coffee prices are being squeezed by a global glut, especially from Brazil, the largest coffee grower.

May Robusta coffee futures closed down $7, or 0.5%, at $1525 a tonne.

May raw sugar futures rose 0.04 cents, or 0.3%, to 12.33 cents per pound.

May sugar futures closed down 40 cents, or 0.1 percent, at $340.10 a ton.

New York cocoa futures in may closed up $15, or 0.7%, at $2217 a tonne, the third consecutive day of gains.

London May cocoa futures closed 18 pounds higher, or 1.1 percent, at 1684 pounds a tonne. (end)

The decline in coffee prices is mainly due to fundamental pressures: the global supply glut has hit prices hard, particularly from Brazil, the largest coffee grower.

During the 2018 / 2019 planting season, under the influence of good weather and improved coffee growing technology, Brazilian coffee bean production reached an astonishing all-time high of 63.05 million bags (60 kg each) and exports reached a record 39.8 million bags.

As a result, Arabica coffee futures are one of the worst performing commodities this year, down about 20 per cent over the past 12 months. To be exact, speculators have maintained a clear short position of the breed for as long as 18 months.

As for 2019, although the Brazilian coffee harvest season does not begin until April, agencies have made forecasts for Brazilian coffee production this year. Under the influence of small production years and the recent dry climate and lack of rain, major institutions are not optimistic about Brazilian coffee production in 2019, most of them think it is around 55 million bags.

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