Coffee Market Swings Amid Conab Estimates and Low Liquidity in Brazil

The international coffee market showed divergent behavior this Tuesday (May 6), reflecting the influence of distinct factors on the New York and London exchanges. While arabica coffee ended the day higher, driven by concerns about supply and the progress of the harvest in Brazil, robusta declined following data released by Conab. The estimate of a record conilon crop — with a 28.3% increase in average productivity and a forecast of 18.7 million bags — pressured prices on the London exchange, signaling a more comfortable supply outlook for this variety.

Despite the momentary relief in robusta, the market remains focused on structural elements that continue to support prices. Marcelo Fraga Moreira, from Archer Consulting, highlights that Brazilian shipments, the current harvest progress, and Vietnam’s exports will remain the main pillars of support. In addition, certified stocks on ICE remain low — around 800,000 bags — which equates to only four days of Brazilian exports, reinforcing the scenario of limited global supply, especially for high-quality coffees.

In Brazil, the physical market remains stalled, with producers holding back coffee in response to current offers. Even with the arrival of the 2024 harvest, available volumes remain historically low, keeping liquidity restricted. Nevertheless, domestic prices partially followed the gains on the NY exchange, with increases recorded in key regions like Guaxupé, Franca, and Campos Gerais. Producers’ cautious stance reflects a resilient market, unwilling to sell below fair price levels, which helps sustain values even amid an active harvest season.

Source: Notícias Agrícolas