On the New York exchange, coffee futures prices continue to decrease for the second consecutive day following a series of significant jumps. Prior to this, coffee futures contracts had shown steady growth for eight consecutive days.
This is reported by Finway
Reasons for the Change in Market Trend
According to analysts, the primary reason for the change in dynamics is the concerns among market participants regarding excessive price increases. Experts note that the previous rise was mainly driven by low trading volumes rather than active purchases. As a result, many coffee contracts became overvalued, leading to the current decline.
Decline and Predictions for Future Movement
On Tuesday, August 26, the most actively traded coffee contract fell by 3.7%. This marked the largest single-day drop since August 1. Experts suggest that the current downward trend may intensify in the near future.
“Now that overvalued contracts are losing value, this trend may accelerate going forward,” noted broker Harry Howard from Sucden Financial Ltd.
At the same time, specialists estimate that the current market pullback is primarily technical in nature, rather than a result of fundamental changes in the industry.