NEW DELHI: Brazil, the world’s leading manufacturer of coffee and sugar, continues to face one of the most extreme drought in its past. As investors continue to be focused on the situation, the dry conditions have persisted and the weather forecasts indicate there wo n’t be any immediate relief. This will cause global prices for both commodities to rise on Thursday as the focus remains on the situation.
The drought has caused some sugar-producing regions to have land fires, while the mocha crop, which is in its essential flowering phase, has been particularly hit. Researchers from LSEG suggest that although some climate designs predict the appearance of rain in Brazil, it is unlikely to occur until mid-to-late October, if at all, AFP reported.
They state,” Total, the estimates for Brazil looks mostly bad going into October, with a tinge of pleasure towards the end of the month”.
Experts and dealers in the coffee industry have noted that Brazil’s trees could still be revived despite the perilous produce scenario. The scarcity has driven benchmark arabica futures on the ICE exchange to a 13-year high of$ 2.7380 ( Rs 229.11 ) per lb, with prices trading up 0.9 % at$ 2.7150 ( Rs 227.14 ) by 11: 23 GMT ( 4: 53 pm IST ). Similarly, natural sweets prospects reached a 7-month top of 23.71 cents per kg and were eventually trading up 1 % at 23.66 cents.
In Vietnam, the world’s best robusta coffee maker, native rates have decreased this week in anticipation of the new produce, with investors reporting favorable wind conditions. Because the two grades are somewhat identical, an increase in Vietnam’s result might help to lessen some of the upwards pressure on mocha prices. However, Vietnam experienced bad weather earlier this year, and it is anticipated that the impending crop may reflect this, according to AFP.
As of 1123 GMT, robusta coffee futures, which reached their highest level in nearly 50 years last week, were trading up 1.4 % at$ 5, 223 a metric ton, while white sugar futures were up 0.6 % at$ 600.40 a ton. In other soft commodities, December New York cocoa rose 3.7 % to$ 8, 250 a ton, and March London cocoa rose 1.7 % to 4, 609 pounds per ton.
