Coffee prices rose for a third straight day as extreme heat in top supplier Brazil brings risks to the next crop while recent strength in the country’s currency reduces the appetite of sellers to export.
The outlook for above-average temperatures in key coffee areas this week is “bringing a certain discomfort” to market participants, said Thiago Cazanini, president of Cazarini Trading Co. Crops will face dryness for the coming weeks and rains are needed before the start of October or the fruit development will be harmed, he said.
The weather is a concern for both the arabica and robusta varieties. Dryness and heat associated with an El Niño weather pattern could be damaging to robusta areas since Brazil has been crucial for global supplies of the bean.
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The most-active arabica futures gained as much as 1.2% to $1.611 a pound in New York, while robusta rose as much as 2.1%. Strength in the Brazilian real also affected markets, as the currency had a fourth straight day of gains compared to the dollar.
