Adverse Weather in Brazil and Tight Stocks Drive Coffee Prices Higher

Coffee prices ended Monday with strong gains, driven primarily by adverse weather conditions in Brazil’s coffee-growing regions. The lack of rainfall in Minas Gerais, which received only 12% of its historical average last week, reignited concerns about crop development and future product availability. This weather scenario increased market risk sentiment and attracted buyers, especially amid the current limited supply of Arabica coffee available for sale, reinforcing a gain of over 2% on international exchanges.

From a fundamental standpoint, the market structure remains tight. As highlighted by analyst Marcelo Fraga Moreira, global inventories are still low, and global production continues to point to a significant deficit compared to consumption — estimated between 9 and 17 million bags. A more consistent flow of the new crop into exports is expected only from June onwards, keeping short-term supply constrained. Adding to this are geopolitical instabilities in the Red Sea and tariff uncertainties in the United States, which contribute to the volatility of international trading, according to analysts from Rabobank.

In the domestic market, the upward trend was also strongly reflected. The main Arabica-producing regions recorded significant price increases, with quotes nearing or surpassing R$ 2,600 per bag, as seen in Franca/SP and Varginha/MG. The Pulped Natural (Cereja Descascado) type also followed this price appreciation. These adjustments indicate that the domestic market is closely aligned with external fluctuations and sensitive to the restricted supply scenario. The tendency is that, unless there is climate relief or significant harvest progress, prices will remain supported both in the exchanges and across Brazilian trading regions.

Source: Notícias Agrícolas