FX.co ★ Arabica Coffee Futures Hold Near October Highs

Arabica coffee futures have remained above $4.10 per pound, hovering near their peak levels for October, driven by indications of tightening global supplies. According to the International Coffee Organization (ICO), global coffee exports for the current marketing year (October to September) have decreased by 0.3% year-on-year to 138.658 million bags. The market fundamentals are robust, supported by low inventory levels and weather-related uncertainties afflicting key coffee-producing nations. Climate change is impacting production, with Brazil experiencing below-average rainfall and regions like Central America and Vietnam facing extreme weather events, such as Hurricane Melissa and Typhoon Kalmaegi, respectively. The ICO has also highlighted that shipping delays due to container shortages and restrictions in the Suez Canal are exacerbating supply pressures. Traders are closely monitoring developments in the negotiations between Brazil and the United States, aiming to eliminate the 40% tariff on Brazilian coffee exports. Additionally, a stronger Brazilian real has further buoyed prices by making local exports less appealing for producers.