Arabica Coffee Extends Gains as Exchange Stockpiles Dwindle

(Bloomberg) -- Arabica coffee futures climbed for the ninth straight session in New York, hitting the highest in over three months as stockpiles decrease and as shipments from top producer Brazil stall.

The most-active contract rose as much as 2.3% on Monday, to the highest since May 12. The nine-day winning streak is the longest since early February.

A significant drop in the share of Brazilian beans in certified warehouses and a low volume of coffee pending classification are a challenge, said Laleska Moda, market intelligence analyst at Hedgepoint Global Markets. Brazilian growers continue to show “little interest in trading large volumes,” she added in a report.

Farms in Brazil have nearly concluded the harvest for this year’s crop, consultancy Safras said Friday. Still, preliminary data on exports show that shipments are weaker compared to last year. Exporters group Cecafé reported a total of 1.8 million bags were shipped in August as of last Friday, which compares to 2.1 million last year.

The move comes after the US imposed 50% tariffs on Brazilian goods including coffee, which is driving importers to delay orders.

Weather is also affecting the coffee trade as farmers await the flowering period set to start in September. That’s a key development phase ahead of next year’s harvest. Frost was reported in some producing regions earlier this month, though damage so far has been limited. Farmers remain on alert as colder weather can trigger flower bud drop and reduce future yields.

--With assistance from Ilena Peng.

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