
Feb 23
/
Natália Gandolphi
Coffee Weekly Report - 2024 02 23
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- In 2024, coffee prices correlate with other commodities; still, it’s important to highlight the differences between arabica and robusta, especially in February.
- Arabica, initially on a downtrend, aims to match robusta's gains, reflecting nuanced export seasonality dynamics. Arabica's curve, compared to a year ago, has a posterior inflection point, aligning with July deliveries and anticipating higher output for the 24/25 crop in Brazil.
- Robusta's current backwardation contrasts with the previous year's pattern. The 6th contract marked the inflection point, responding to seasonality. Looking ahead, robusta's peak supply is in March, gradually decreasing until the beginning of the next cycle, as Brazil’s and Indonesia’s supply volume is lower than Vietnam’s.
- Arabica's seasonal index highlights May and July, while the New York future curve reflects cautious optimism for the second supply period, unaffected by certified stocks in NY.
Seasonal impacts on future coffee curves
In 2024, coffee prices have exhibited similarities in trend lines with other commodities such as wheat, oil, sugar, and, to a lesser extent, soybeans and corn. Notably, cocoa faces a significant crop failure in West African countries, and natural gas, after rallying in the first weeks of the year, responded to solid supply figures. However, the standout difference lies in the performance of arabica and robusta. Arabica began the year on a downtrend but has since responded and is now aiming to match robusta's year-to-date gains.
Examining the arabica and robusta curves reveals interesting points. For arabica, the curve now, compared to one year ago, has a posterior inflection point, corresponding to the July delivery. This coincides with the start of Brazil's crop shipments, marking the 24/25 crop, with market expectations of higher output compared to 23/24 for arabica, despite weather impacts from veranico episodes during development.
Figure 1: Commodity Prices Index (Jan 02 = 100)

Source: ICE, Refinitiv
Figure 2: Future Curve – NY Arabica (c/lb)

Source: ICE, Refinitiv
In contrast, robusta's curve has undergone more changes. While currently in complete backwardation, one year ago, the 6th contract marked the inflection point - the last January contract. This is a month when the robusta exports seasonality curve increases, especially from Vietnam. However, market participants now observe lower availability from Vietnam in this cycle.
Looking ahead, after a momentary drop in seasonality following the Chinese New Year, peak robusta supply is expected in March, gradually decreasing until the next cycle. Despite Indonesia and Brazil contributing to exports during this window, the volumes do not compare to the dominance of Vietnam.
Arabica's seasonal index, while less pronounced, highlights May as the peak export month for Central American countries and Colombia's main crop, and July, when Brazil starts to export new crop supplies. The New York future curve reflects market caution for the initial supply period, with a slightly more optimistic outlook for the second one. This is despite incoming stocks being certified in NY, which does not challenge the seasonal view in any way – as seen in Figure 4.
Figure 3: Future Curve – LN Robusta (USD/mt)

Source: ICE, Refinitiv
Figure 4: Weighted Export Seasonality (%)

Source: hEDGEpoint
In Summary
In 2024, coffee prices correlate with other commodities, but arabica and robusta show distinct performances. Arabica, starting on a downtrend, aims to match robusta's gains. Arabica's curve, compared to a year ago, now has an earlier inflection point, aligning with July deliveries and expectations of higher output for the 24/25 crop in Brazil.
Robusta's curve, currently in backwardation, contrasts with a year ago when the 6th contract marked the inflection point, initially responding to seasonality. Looking forward, robusta's peak supply is expected in March, gradually decreasing, while arabica's seasonal index highlights May and July. The New York future curve reflects caution for the initial supply but a slightly optimistic outlook for the second, with the trend itself yet unaffected by certified stocks in NY.
Robusta's curve, currently in backwardation, contrasts with a year ago when the 6th contract marked the inflection point, initially responding to seasonality. Looking forward, robusta's peak supply is expected in March, gradually decreasing, while arabica's seasonal index highlights May and July. The New York future curve reflects caution for the initial supply but a slightly optimistic outlook for the second, with the trend itself yet unaffected by certified stocks in NY.
Weekly Report — Coffee
Written by Natália Gandolphi
natalia.gandolphi@hedgepointglobal.com
natalia.gandolphi@hedgepointglobal.com
Reviewed by Victor Arduin
victor.arduin@hedgepointglobal.com
www.hedgepointglobal.com
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