Coffee Market Plunges Amid Forecast of Larger Harvest and Currency Pressure

Monday (12th) was marked by sharp declines in coffee prices on international exchanges, with notable drops in both arabica and robusta varieties. According to analysts, the movement was driven by external factors such as the recent trade agreement between the United States and China, which prompted speculators to reposition themselves in the market, and the appreciation of the dollar, which reached its highest level in a month, putting pressure on prices in New York. Additionally, expectations of a more robust Brazilian harvest in 2025 also contributed to the bearish trend.

The consultancy firm Safras & Mercado revised upward its estimate for Brazil’s coffee production in the 2025/26 season, highlighting a significant increase in conilon output (20% more than the previous year), while arabica is expected to see an 11% annual drop. Still, the total estimated volume of 65.51 million 60-kg bags represents only a slight 1% decrease compared to last season. Despite this high figure, experts such as Eduardo Carvalhaes remind that production remains insufficient to meet domestic demand and export needs, keeping the market focused on the balance between supply and demand.

In the domestic market, prices followed the negative trend of the external scenario. Quotes for arabica type 6 and pulped natural coffee fell significantly in several producing regions, reflecting pressure from the new harvest and low liquidity. With few remaining stocks from the 2024 harvest still in producers’ hands and the 2025 harvest beginning, some deals are starting to appear, though cautiously. It is a moment of prudence, with market players closely monitoring upcoming developments in weather, harvesting progress, and global politics to define their commercial strategies.

Source: Notícias Agrícolas