Supply Concerns Drive Arabica Coffee Rally

Arabica coffee market saw a sharp rally on the New York Stock Exchange this Monday, propelled by fears over the grain's supply, especially after rains that may have damaged crops in Brazil. The most traded contract surged by 1.56%, reflecting a rebound from losses in the previous session and traders' attention to both internal and external factors affecting the market, such as the situation in Vietnam, rising consumption in Asia, and global logistical issues.

The heavy rains recorded in the coffee-growing region of Minas Gerais last week, which far exceeded historical averages, raised concerns about potential impacts on Arabica plantations, as Minas Gerais is one of Brazil's main coffee-producing regions. Additionally, traders continue to monitor global events, such as terrorist attacks in the Suez Canal, which could affect international coffee trade. However, Arabica gains were limited by the depreciation of the Brazilian real against the dollar, which tends to encourage exports but may pressure external coffee prices.

In the Brazilian domestic market, coffee prices also mirrored the increases seen in the external market, with notable gains in Franca/SP and Campos Gerais/MG. This movement reflects the influence of fluctuations in global markets on the domestic market, highlighting the coffee sector's interconnectedness and sensitivity to both domestic and international conditions.

Source: Notícias Agrícolas