Climatic Challenges and Volatility Shape the Global Coffee Market

The International Coffee Organization’s monthly report highlights a significant increase in green coffee exports in August, showing an 8.8% rise compared to the same period in 2023. This growth has driven cumulative exports for the 2023/24 season up by 10.5%, underscoring the resilience of the coffee export market despite adverse weather conditions affecting some producing regions, such as Brazil. Global demand for coffee remains strong, fueling continued upward momentum in export volumes.

However, weather conditions remain a crucial factor for the future harvest, particularly in Brazil, one of the world’s largest producers. The Hedgepoint report indicates that the rains expected in the coming weeks may offer some relief to Brazilian coffee plantations, though it is too early to predict the full impact. The flowering stage of the coffee plants and consistent rainfall over the next few months will be key in determining the success of the 2025/26 crop. With uncertainties still looming over production, the market remains cautious, as reflected in the fluctuations of coffee futures prices.

The prices for both arabica and robusta experienced significant drops on international exchanges, with a decline of over 4% in future contracts, affecting the physical coffee market in Brazil. This downturn is linked to climate expectations and the appreciation of the Brazilian real against the dollar, which has hampered export negotiations. Domestically, arabica and pulped natural coffee prices fell in several regions, such as Franca/SP and Campos Gerais/MG, reflecting the pressure from international markets. The global uncertainty, coupled with volatile prices, continues to demand close attention from producers and exporters.

Source: Notícias Agrícolas