RNY Market Watch: 2024 sees volatile “C” Market coffee prices

Welcome to our first Market Watch of 2024! Andrew Blyth & Tom McLaughlin are here to provide you with the latest insight into coffee exports, “c” market coffee prices, and more as of the end of 2023 and looking forward to this year.

New year, new “c” market coffee prices?

Though it is a new year, coffee futures prices, as measured by the ICE KCH’24 futures contract, continue to be very volatile. In fact, the 3rd quarter of 2023 saw “c” market coffee prices trade as low as $1.45/lb. on October 10th and as high as $2.0390 on December 19th. After a successful harvest wrapped up in August, Brazil’s coffee exports ramped up in October and November. Furthermore, each of those months saw total exports exceed 4 million bags. This figure has only been reached a few other times in Brazil’s coffee export history. So, why did prices rise sharply at the end of 2023?

Above normal temperatures and very little rain fueled concern that Brazil’s next harvest (2024/25) may be impacted. Unsurprisingly, prices retreated when the temperatures dropped and rain returned. This led to prices briefly trading under $1.8000 on January 8th & 12th. As weather can be so unpredictable, prices of many agricultural commodity markets are equally as unpredictable. These types of trading markets attract speculators, helping to further push prices beyond the norm.

What does this mean for you?

While we can expect this price volatility to continue well into 2024, we are your resource for preparedness. Volatility in a market that is so critical to financial success of millions across the world is a significant challenge for all. That being said, it’s one that we’ve weathered many times, so give us a call! Let us use our forecasting and inventory management tools to determine your usage and build a plan for your upcoming needs. If you have a purchase plan in place, you can be ready to take advantage should a dip in the market allow for that opportunity.