Arabica Coffee Futures Register Gains Amid Economic Uncertainty

The arabica coffee futures market closed Tuesday’s session with significant gains, driven by a 180-point increase in the December/24 contract, reflecting a positive movement compared to previous days. The 135-point rise in the March/25 contract and the 110-point rise in the May/25 contract further reinforce investor optimism in the sector. In the robusta market, gains were more modest, with the November/24 contract showing a slight increase of $6 per ton. These upward movements indicate that investors are responding positively despite global economic uncertainties.

In the macroeconomic scenario, the U.S. Federal Reserve (Fed) plays a crucial role in coffee price behavior, as the financial market tries to balance the risk of a recession with the possibility of a "soft landing" for the U.S. economy. Investors’ concerns about the timing of the Fed’s actions, amid a weakening labor market, create an atmosphere of caution. However, expectations that the impact on coffee could be positive due to potential economic stabilization are providing support for the recent price increases.

In the Brazilian physical market, upward movements were also observed, although with smaller variations. Arabica coffee type 6, for instance, saw a 4.20% increase in Machado/MG, while other regions, such as Campos Gerais and Franca, showed more modest gains. The peeled cherry coffee followed this trend of appreciation, with more significant growth in Varginha. Although these are not extremely sharp variations, they reflect a cautious but optimistic domestic market, influenced by current economic and climatic conditions.

Source: Notícias Agrícolas