When I last wrote about coffee on August 8 on Barchart, the price of nearby September ICE Arabica futures was $1.6155 per pound, and ICE European September Robusta futures were $2,688 per ton. I outlined four reasons why Arabica futures could recover to $2 per pound or higher, including:
- Price consolidation over the past months will eventually give way to a move to the up or downside. Given higher production costs, supply chain issues, and the uncertainty of the weather conditions in the leading growing countries, the odds favor higher prices.
- Robusta futures at near record highs support higher Arabica coffee futures prices.
- Coffee demand is inelastic, as consumers can absorb higher prices without curtailing consumption.
- The trend since 2019 remains bullish above the $1.4205 level, which now stands as a critical technical support level for the Arabica futures.
