Climate Concerns Drive Coffee Prices Up on the London and New York Exchanges

Futures coffee prices on the London Exchange recorded significant increases this Wednesday (20th), with gains of up to 3.6% in major contracts. This appreciation was mainly driven by concerns over adverse weather conditions in robusta coffee-producing regions, particularly in Vietnam. The prolonged drought in the country, one of the world's largest robusta producers, raises fears of a potential drop in global production, which is keeping futures prices at high levels.

Meanwhile, on the New York Exchange, arabica coffee futures also saw gains, though more modest. During the afternoon, prices rose more than 2% but closed with less pronounced increases. Concerns about drought in Brazil, which could result in premature flowering of coffee trees and consequently reduce yields in the 2024/25 harvest, have kept arabica prices at elevated levels. This moderation in the pace of gains suggests that the market is cautious, waiting for more concrete climate developments.

In the Brazilian physical market, coffee prices followed the upward trend, with type 6 hard drink and peeled cherry coffee showing increases in various producing regions, such as Guaxupé and Campos Gerais. These increases reflect the direct influence of international quotations and internal concerns about weather conditions, which affect both the supply and quality of available coffee. The current scenario highlights the market's sensitivity to global and regional weather conditions, which continue to be key factors in coffee pricing.

Source: Notícias Agrícolas