Arabica Coffee Depreciation Amid Brazilian Harvest and Climate Concerns

On Friday (26), the arabica coffee futures market experienced significant depreciation for the main contracts on the New York and London exchanges. Prices fell below 230 cents/lbp, with the September/24 contract dropping 445 points, trading at 230.25 cents/lbp. Similarly, the contracts for December/24, March/25, and May/25 also suffered substantial declines, indicating a trend of price adjustment for future contracts. In the London market, robusta also depreciated, with prices falling between $70 and $93 per ton, reflecting a correction due to market conditions.

According to Safras & Mercado, the harvest of the 2024/25 coffee crop in Brazil progressed rapidly, reaching 81% by July 23, compared to 74% in the same period last year and above the 5-year average of 77%. However, despite the accelerated progress, there are significant concerns about the yield of the crop due to high temperatures and water deficits in major producing areas. These adverse weather conditions may negatively impact the quantity and quality of the harvested coffee, creating uncertainties in the market about future supply.

In the Brazilian physical market, there were varied price adjustments in the main trading regions. In Guaxupé/MG, type 6 hard drink coffee fell by 0.69%, while in Poços de Caldas/MG and Machado/MG, there were slight increases of 0.71% and 0.70%, respectively. The peeled cherry type followed a similar trend, with mixed price variations, reflecting market volatility and uncertainties due to climatic conditions and harvest progress. These local price adjustments highlight the sensitivity of the physical market to weather fluctuations and the harvest's evolution, directly influencing the supply and demand dynamics.

Source: Notícias Agrícolas