Arabica Coffee Recovers After Declines, Supported by Lower Crop Expectations and Declining Stocks

Arabica coffee futures on ICE rose on Wednesday, recovering part of the losses from the previous two sessions. The 1.6% increase pushed prices to $4.119 per pound after hitting a one-and-a-half-week low on Tuesday. This movement suggests an attempt to stabilize the market after a period of strong volatility, driven by a combination of technical factors and supply and demand fundamentals. The recent streak of record highs, followed by a sharp correction, highlights the market’s sensitivity to any signs of changes in production and global inventories.

One of the key factors supporting prices is the expectation of a smaller crop in Brazil for the 2025/26 season, as noted by Cooxupé, the country’s largest coffee exporter. The cooperative projects a 10% reduction in the volume received from farmers due to adverse weather conditions in 2024. Additionally, ICE-certified stocks continue to decline rapidly, with a drop of more than 130,000 bags on Tuesday. The tightening global coffee supply reinforces the perception that prices may remain elevated, limiting significant declines in the short term.

In the robusta market, the trend was also bullish, though to a lesser extent, with a 0.4% increase, reaching $5,746 per metric ton. Demand for robusta remains strong, driven by high arabica prices, leading roasters to seek more affordable alternatives. Furthermore, forecasts of dry weather in Brazil in the coming days are raising concerns about future supply, contributing to sustained high prices. Given this scenario, the market remains focused on climate developments and stock movements to determine the next price trends in the coffee sector. Fonte: Investing Café fecha em alta e açúcar bruto atinge novo pico de 2 meses Por Reuters