Increased Supply and Demand Uncertainty Pressure Global and Domestic Markets

The global coffee market faced a significant downturn this Wednesday, with arabica futures on the New York Stock Exchange posting sharp losses ranging from 1,045 to 1,155 points. This drop pushed arabica prices to their lowest level in the past three weeks, while robusta also saw a steep decline, with prices in London falling by up to $138 per ton. The primary factors cited were the increase in global supply and uncertainty surrounding demand, particularly in light of additional tariffs imposed by the U.S., which are expected to negatively impact imports for major companies in the sector.

Price pressure has been intensified by forecasts of increased production. The USDA projected a 5.1% rise in the Honduran harvest, while Brazil’s output is also expected to surpass previous estimates, according to both Conab and consulting firm Safras & Mercado. The oversupply, combined with concerns about declining consumption, creates an unfavorable outlook for producers and investors, further fueling caution in the market. The rise in robusta stockpiles—reaching the highest level in seven and a half months—reinforces this scenario of imbalance between supply and demand.

In the domestic market, the effects of the international drop were immediate. Major producing regions recorded consistent devaluations, with prices falling over 2% in areas such as Guaxupé, Varginha, and Campos Gerais. Arabica type 6/7 and pulped natural arabica saw widespread declines, directly affecting producers’ income. This scenario points to a continued downward trend in the short term, especially if global demand fails to recover significantly in the coming months.

Source: Notícias Agrícolas