Coffee Futures Prices Decline Amid Real Depreciation and Stock Recovery

Coffee futures prices registered a decline on Tuesday in both the New York and London exchanges, with the primary factor being the depreciation of the Brazilian real against the US dollar. In New York, contracts for July/24, September/24, December/24, and March/25 saw significant decreases, closing at 226.30 cents/lbp, 226.25 cents/lbp, 224.85 cents/lbp, and 223.7 cents/lbp, respectively. In London, robusta prices also dropped, with July/24 and September/24 contracts falling to $4,108/ton and $3,852/ton, respectively, hitting two-and-a-half-week lows.

The real's depreciation against the dollar, reaching its lowest level in 17 months, encouraged Brazilian coffee producers to increase exports, contributing to the price drop. Additionally, the recovery of ICE-monitored coffee stocks, both robusta and arabica, also pressured prices downward. Robusta stocks reached an 11-month high, while arabica stocks, despite falling to a 24-year low in November 2023, recovered to a 15-month high.

However, climatic concerns continue to provide positive support for coffee prices. Drier-than-normal conditions in Brazil may negatively impact arabica coffee crops, while excessive drought in Vietnam raises fears about robusta production. These adverse climatic factors highlight the complexity of the coffee market, where economic and environmental variables intertwine to influence prices.

Source: Notícias Agrícolas