Climate Variations and Supply and Demand Dynamics Impact Prices

The robusta coffee market closed higher, with the July contract recording an increase of $18 per ton, representing a 0.5% rise and reaching $3,420 per ton. This appreciation is attributed to recent rains in Vietnam, the main producer of

robusta coffee, which have exerted pressure on prices. However, despite these rains, concerns persist about the

potential adverse effects of previous, drier weather conditions on crops, keeping the market attentive to the evolution of the climate.

On the other hand, the arabica coffee market saw a 0.8% decrease, with the July contract quoted at $1.979 per pound. This price decline may be partially attributed to the increase in certified arabica and robusta coffee stocks by ICE, which are helping to keep prices under control. Additionally, reports from Brazilian brokers indicate that farmers are hesitant to sell their products after the recent price drop, which may also be contributing to downward pressure on prices.

These movements reflect the sensitivity of the coffee market to weather conditions and supply and demand dynamics. While recent rains in Vietnam may provide some relief, there are still uncertainties about the full impact of these climate changes on crops. On the other hand, Brazilian farmers' reluctance to sell suggests a careful assessment of market conditions and a possible expectation of more favorable prices in the future.

Source: Investing.com