Coffee Futures Prices Rise with Real Appreciation and Climate Concerns in Vietnam

The coffee futures market closed on Wednesday with significant gains in the main contracts, both in New York and London. The primary factor driving these increases was the recent appreciation of the Brazilian real against the dollar, prompting investors to cover short positions. A stronger real discourages Brazilian coffee producers from selling their crops on the international market, reducing the available supply and putting upward pressure on prices. This trend was observed across all futures contracts, with the March 2025 contract recording a notable increase of 2.74%.

Despite the recent gains, the Arabica coffee market remains influenced by factors that could limit further price increases. The reduction in concerns about dry weather in Brazil and the country's growing exports suggest that the global supply of Arabica coffee may remain strong. Additionally, the advanced harvest in Brazil is also exerting downward pressure on prices by increasing the availability of coffee in the market. On the other hand, Robusta coffee has maintained its support due to drought fears in Vietnam, which could reduce future production and limit the global supply of this variety.

In the Brazilian physical market, positive price variations followed the trends observed in the futures markets. The type 6 hard drink and peeled cherry varieties recorded gains in several regions, such as Guaxupé, Campos Gerais, and Espírito Santo do Pinhal. These increases reflect the current market dynamics, where the appreciation of the real and the climate uncertainties in Vietnam are directly influencing negotiations, leading to adjustments in domestic coffee prices.

Source: Notícias Agrícolas