Arabica Futures Slip

Arabica coffee futures dropped over 3% to trade below $3 per pound, their lowest since mid-October, pressured by a weaker Brazilian real following the presidential election results and expectations of improved supply. The Brazilian real’s depreciation makes coffee exports more attractive to local producers by increasing their returns in local-currency terms, potentially boosting global supply. Meanwhile, traders monitored inventories, Brazilian export performance and weather conditions ahead of the next harvest. ICE-certified arabica stocks have declined over the past month and remain only moderately above their 27-year low at around 240,000 bags. Meanwhile, Brazilian coffee exports have strengthened, with shipments reaching approximately 3.30 million bags by October 22, up 43.2% from the same period a year earlier, according to Cecafé. The increase in shipments comes as Rabobank sees the potential for a recovery in global coffee stocks in the coming cycles.