KUALA LUMPUR, Dec 4 (Bernama) -- Bursa Malaysia rallied to close broadly higher on Wednesday amid strong buying interests mainly in utility and technology stocks, with the benchmark index gaining 0.44 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.13 points to 1,614.09 from Tuesday’s close of 1,606.96. The index opened marginally higher at 1,606.97 and moved between 1,606.53 and 1,616.03 throughout the day. Advancers thumped decliners 727 to 381 on the broader market, with 522 counters unchanged, 781 untraded and 10 suspended. Turnover advanced to 3.60 billion units valued at RM3.30 billion versus 3.32 billion units valued at RM3.30 billion on Tuesday.
Rising arabica coffee prices have caused financial chaos in Brazil’s coffee market, leaving producers and exporters struggling to manage soaring costs and margin calls.
Massive Margin Calls
- Brazil’s Atlântica Exportação and its sister company Cafebras are seeking 60 days to renegotiate debts to avoid bankruptcy.
- $7 billion in margin calls were triggered in November as arabica prices surged.
Arabica Prices Soar
- Arabica coffee futures rose 70% this year, reaching the highest levels since 1977.
- The price surge forced traders to buy back futures, creating a vicious cycle of rising costs.
Rising Costs Strain Finances
- At Montesanto Tavares Group, the cost of hedging skyrocketed to 158% of accounts receivable in November.
- Companies face unsustainable cash flow problems due to higher borrowing and operational costs.
Logistics and Supply Issues
- Exporters spent an extra $1.2 million on storage and port fees this year.
- Rising shipping costs and drought conditions threaten to reduce the next arabica harvest.
Wider Commodity Crisis
- Similar disruptions are seen in other commodities like natural gas and cocoa, compounding financial stress for firms trading multiple products.
The sharp rise in prices, combined with operational and financial pressures, is pushing Brazil’s coffee industry toward a breaking point.
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