The May arabica coffee futures closed up with gain on Tuesday. KCK20 settled with a rise of 3.25 or 2.79%. DFK0, May ICE Robusta coffee closed up +12 or + 1.01%.
Arabica coffee price is at one week high since Brazilian real gained strength. In fact, the real surged on Tuesday, by +1.20% against the dollar.
A stronger real hinders export selling by Brazil’s coffee producers. 
On Monday, Neto, the president of Brazil, warned that the central bank would watch any dysfunctionality in the market that would require central bank currency market intervention in support of the real.
The coronavirus outbreak has raised concerns about supply disruptions of coffee in South America. Sao Paulo is in a 15-day quarantine since March 24. Colombian population is on a three-week lockdown.
Volcafe, a coffee-trader, told clients that the coronavirus pandemic is causing logistical holdups. They will become more widespread in major coffee-producing countries, which may hold coffee shipments to ports and other transport operations.
Weather Forecasts have been bullish for coffee prices
The peak of the coronavirus pandemic in Brazil is expected at the coffee harvest period. It could get problematic since the country harvests coffee manually. Many local laborers and workers may stay away from work, or be in quarantine because of the virus.
Heavy rain in Brazil may prevent the coffee harvest, which is a bullish factor for coffee prices. On Monday, Somar Meteorologia reported that in the past week, rainfall in Brazil’s largest arabica coffee-growing region measured 141% of the historical average.
Colombia Coffee Growers Federation reported on Friday that Colombia’s Mar coffee production fell -12 %, and exports dropped -21 %. Colombia is the second-largest producer of Arabica coffee beans in the world.
Arabica coffee prices weakened when ICO, the International Coffee Organization, slightly reduced its global 2019/20 coffee deficit estimate to -474,000 bags from a Feb estimate of -476,000 bags last Friday. ICO also stated that weak global economic growth this year and rising unemployment would reduce coffee demand and put downward pressure on coffee prices.
As the coronavirus pandemic spreads globally, coffee prices remain under pressure. Because of the measures taken to fight the spread of the virus, lots of restaurants, bars, and cafes closed around the world.
Vietnam’s efforts
Last Wednesday, the Vietnamese government ordered a 15-day nationwide lockdown. It may lead to the disruption of coffee supplies to delivery points in the country. Vietnam is the world’s largest robusta coffee producer. On March 27, the country’s General Statistics Office reported that Vietnam’s January-March coffee exports fell by -3.9% y/y to 469,000 MT.
Coffee prices saw support from dwindling US coffee inventories as well. Last Thursday, ICE monitored coffee inventories dropped to a two year low of 1.947 mln bags. ICO has further reported that a slowdown in global coffee exports will support commodity prices.
Vietnam’s National Center for Hydro-Meteorological Forecasting reported on March 17 that Vietnam Central Highlands had seen little rainfall. The country’s major coffee-growing region is likely to face drought in spring. The news has also been a positive factor for prices.
