Coffee on the Decline: Rising Stocks, Slow Harvest, and a Market on Alert

The international coffee market closed the week with significant losses, as arabica and robusta prices dropped by more than 2% on the major exchanges. The primary pressure came from abundant supply, especially as harvests advance in Brazil and Indonesia, and with ICE-monitored stocks reaching their highest levels in recent months. This stock recovery, particularly for robusta, has negatively impacted futures contracts, as noted by traders and Reuters sources. Contracts in London and New York ended the day with considerable losses, reflecting the market’s sensitivity to any signs of oversupply.

Despite this short-term pressure, the structural scenario remains tight, as highlighted by the Carvalhaes Office. Even with optimistic projections for Brazil’s 2025 crop, historically low carryover stocks and a fragile balance between global supply and demand keep the market vulnerable to further fluctuations. The report notes that the next crop, though expected to be sizeable, will likely resemble the current one and won’t significantly ease the global balance. This keeps the market in a state of alert, where any climatic or logistical variation can have a meaningful impact on prices.

In the domestic market, Brazil’s 2025 harvest is progressing slowly, with only 7% of the volume collected by mid-May, according to Safras & Mercado. Rain in key producing regions such as Espírito Santo, Bahia, and Matas de Minas has delayed fieldwork, along with producers’ decisions to wait for better fruit ripening. This slow pace is also reflected in forward sales of the 25/26 crop, which remain below historical standards. The drop in international exchanges has directly affected internal prices, with declines of over 3% in some arabica-producing regions, indicating a domestic market still closely tied to global price movements.

Source: Notícias Agrícolas