Coffee Market Registers Significant Depreciation

On Tuesday, the Arabica coffee futures market experienced significant depreciation on the New York and London exchanges. The drop in futures contract prices, such as the September/24 contract which fell by 395 points, indicates a market correction after recent gains. This downward trend was also observed in the December/24, March/25, and May/25 contracts. In London, robusta coffee also saw a sharp decline, with the September/24 contract dropping by $100 per ton. This fluctuation reflects the market's sensitivity to climatic conditions and the progress of the Brazilian harvest.

Dry weather in Brazil, while favorable for the current harvest, raises concerns for the next crop. Safras & Mercado reported a rapid harvest pace, with 74% of the 2024/25 crop harvested by July 16, compared to 66% in the same period last year. This accelerated pace could further pressure prices, especially if the dry conditions persist and delay the necessary rains for the next cycle. Additionally, the recovery of ICE coffee stocks, which rose to a one-year high, contributes to the negative price pressure, signaling an increase in available market supply.

In Brazil, the physical coffee market also followed the depreciation trend. Major trading areas recorded price declines, such as in Guaxupé/MG, where type 6 hard drink coffee fell by 0.68%. Negative variations were observed in other regions, including Machado/MG, Varginha/MG, and Franca/SP. The depreciation of peeled cherry coffee followed the same trend, reflecting a market dynamic that responds quickly to climatic fluctuations and the evolution of global stocks. This volatility highlights the importance of climatic conditions and stock management for price stability in the coffee market.

Source: Notícias Agrícolas