London Coffee Futures Dip Amid Weak Market Sentiment

Coffee traders and roasters keeping an eye on global commodity markets saw another dip in futures prices last week, as weakening demand and profit-taking added downward pressure. The drop comes after two agencies revised their forecasts for Brazil’s coffee harvest downward, reviving fears about prolonged dryness affecting key growing regions.

In short: LIFFE’s September Robusta contract dropped 7 USD (0.3%) to 2,097 USD per tonne, while ICE’s October cocoa and sugar contracts also closed lower. These moves reflect broader market caution, driven by producer selling and climate-related worries.

Why Did Coffee Futures Decline?

The primary driver behind the weaker futures prices was producer selling—farmers and intermediaries offloading inventory—as well as profit-taking by speculators. This selling pressure typically increases when traders expect slower demand or face uncertainty in supply outlooks.

Brazil Drought Concerns Resurface

Adding to market anxiety, two separate agencies revised their estimates for Brazil’s upcoming coffee harvest downward the previous day. These downgrades rekindled concerns over the impact of ongoing drought conditions in Brazil, a leading global coffee producer. Such weather-related risks can significantly affect yield and quality, especially in key growing areas.

Daily Commodity Market Movements

On the day in question:

• LIFFE September Robusta coffee futures: down 7 USD (0.3%) to 2,097 USD per tonne
• ICE October raw sugar futures: down 0.11 cents (0.7%) to 16.35 cents per pound
• LIFFE October white sugar futures: down 2 USD (0.5%) to 435.70 USD per tonne
• ICE September cocoa futures: down 12 USD (0.4%) to 3,207 USD per tonne
• London December cocoa futures: briefly hit a contract high of 1,994 GBP per tonne, but closed down 1 GBP (0.05%) at 1,988 GBP per tonne

Frequently Asked Questions

What caused the drop in London coffee futures last week?

The decline was primarily due to producer selling and profit-taking by traders. Additionally, two agencies lowered their forecasts for Brazil’s coffee harvest, raising fresh concerns about the impact of drought on production.

How much did LIFFE Robusta futures fall on the day?

LIFFE’s September Robusta coffee futures dropped by 7 USD per tonne, or 0.3%, closing at 2,097 USD per tonne.

Did other commodity futures also decline?

Yes. ICE October raw sugar fell 0.11 cents (0.7%) to 16.35 cents per pound, LIFFE October white sugar fell 2 USD (0.5%) to 435.70 USD per tonne, and ICE September cocoa futures dropped 12 USD (0.4%) to 3,207 USD per tonne.

What was the movement in London cocoa futures?

December London cocoa futures hit a high of 1,994 GBP per tonne but closed at 1,988 GBP per tonne, down 1 GBP (0.05%).

Why are Brazil’s coffee harvest estimates important?

Brazil is the world’s largest coffee producer, so any downward revision in its expected output can significantly influence global supply forecasts and futures pricing, especially amid ongoing dry weather concerns.

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