Arabica Coffee Futures Market Closes the Week with Devaluation After Gains and Climate Uncertainties

The arabica coffee futures market ended the week with significant devaluation in the main contracts, both in New York and London. After a series of gains driven by concerns about cold weather in Brazilian coffee-growing regions, prices fell this Friday (9th). The decline was notable, with the September/24 contract dropping by 1125 points, trading at 234.05 cents/lbp, reflecting a corrective movement in the market. This devaluation suggests that, despite climate concerns, investors decided to take profits after the recent rally.

In addition to the weather conditions in Brazil, the market was also influenced by positive export data released by Secex, which put downward pressure on prices. Despite the imminent cold weather that could still affect crops, the expectation that Brazil will continue to perform well in exports has moderated the quotations. This scenario is further complicated by the recovery of coffee production in Colombia, which recorded a 22% increase in July, according to the National Federation of Coffee Growers (FNC). The increased supply of coffee from Colombia may be contributing to the pressure on international prices.

In the Brazilian physical market, the impact was similar, with negative adjustments in the main trading regions. The most significant declines were recorded in Varginha/MG and Campos Gerais/MG, reflecting buyers' caution in light of uncertainties in the futures market and adverse weather conditions. The reduction in prices for type 6 hard drink and pulped cherry coffee indicates that the domestic market is closely following international trends, making necessary adjustments in response to the volatility of future prices and supply expectations.

Source: Notícias Agrícolas