Recovery of Arabica Coffee Prices Driven by Slow Harvest and Limited Supply

Domestic coffee prices, after a sharp decline at the beginning of May, began to recover in the second half of the month. This recovery is influenced by the scarcity of available lots in the spot market, especially Arabica coffee, whose harvest is still at a slow pace in various regions of Brazil. This limited supply scenario contributes to the rise in prices, as observed by Cepea researchers.

The Arabica coffee harvest in key producing regions such as Graça (SP), Zona da Mata in Minas Gerais, and Northwest Paraná is between 5% and 10% of the expected production. Despite dry weather conditions being favorable for this initial phase of the harvest, coffee growers are notably concerned about the size of the beans (screen size). Cepea collaborators highlight that smaller beans can negatively impact the quality and yield of the crop, causing apprehension among producers.

In the Cerrado region of Minas Gerais, one of the most important Arabica coffee-producing areas, the harvest is in even earlier stages. This is common, as this region typically starts harvesting later compared to other areas. The slow progression of the harvest in the Cerrado and other regions contributes to the reduced supply of coffee in the market, maintaining upward pressure on domestic prices. This dynamic underscores the complexity of the coffee market and the importance of favorable weather conditions for a good crop.

Source: Investing.com