ICE Coffee Futures End Higher by FC Stone

Arabica coffee futures closed higher on the last day of trading due to continued short
covering.  The active contract for March delivery finished 126.70 higher at 305 cents per
pound. The activity was slow reflecting the holidays.  Markets in Brazil and Colombia
were closed.  Other commodity markets traded with little change. The Arabica Coffee
market, like almost all other commodity markets, had a strong downfall during 2015.
Coffee  lost  28  per  cent.  The  largest  decline  happened  during  the  first  quarter  when
good rains in producing regions in Brazil dissipated the possibility or a repetition of the
drought  from  2014.  Prices  remained  in  a  low  range,  affected  by  producing  country
currency weakness, especially those of Brazil and Colombia. The real fell 42 per cent
while the peso declined by 35 per cent. Carryover inventories in Brazil, and the quick
harvest  recuperation,  such  as  the  ones  from  Colombia’s  and  other  Centro  American
countries, contributed to the equilibrium of supply and demand, to reduce a possible
deficit.