Climatic and Currency Impacts Drive Coffee Futures Prices Higher: Market Analysis

Coffee futures prices experienced slight increases on Monday (19), driven by a combination of climatic and currency factors. Despite minor fluctuations throughout the day, prices found support in the appreciation of the Brazilian real against the dollar, which discourages exports by Brazilian producers. Additionally, the persistent dry weather conditions in Brazil's key coffee-growing regions over the past 120 days have raised concerns about the productivity of the 2024/25 crop, pushing prices higher. For instance, the September/24 contract on the New York Stock Exchange closed with a 45-point increase, reinforcing this upward trend.

Robusta, traded on the London Stock Exchange, also recorded gains, with the September/24 contract rising by $43 per ton. The global market for robusta is being influenced by two main factors: a decline in exports from Vietnam, the world's largest producer, and logistical challenges faced in Brazil, particularly at the Port of Vitória. With Vietnam exporting less, Brazil has been supplying part of the demand, but operational limitations at the port are affecting the export flow, which in turn is contributing to the rise in prices.

In the Brazilian physical market, arabica prices showed variations, with significant increases in some regions, such as Guaxupé/MG, where peeled cherry coffee rose by 2.51%. Conversely, there were declines in places like Franca/SP. These fluctuations reflect local supply and demand conditions, influenced by both the futures market and the climatic and logistical challenges affecting crop production and export. The situation highlights a market sensitive to currency and weather fluctuations, with prices responding quickly to production and export uncertainties.

Source: Noticias Agrícolas