Coffee Market: Climatic Uncertainties Drive Up Prices and Caution Among Producers for Next Harvest

The Brazilian coffee market is facing uncertainty regarding the next harvest, even though recent rains have led to good blossoming. Concerns focus on the ability of these blossoms to set fruit, as many coffee trees, weakened by a prolonged drought, may struggle to develop healthy crops. According to Eduardo Carvalhaes, a more accurate assessment of losses will only be possible from March 2025, following the completion of the rainy season and careful monitoring of temperatures in spring and summer. This outlook is adding a note of caution to the market.

This climate of apprehension is reflected in rising prices, with arabica and robusta futures registering gains as investors begin to price in a potential supply reduction. In New York, arabica contracts saw increases of up to 300 points, while robusta in London saw price jumps between $39 and $47 per ton. These gains are driven by both climatic conditions and below-average rainfall in major growing areas, such as Minas Gerais, which received only 64% of its expected precipitation, according to Somar Meteorologia.

In the domestic market, rising international prices and the dollar’s retreat against the real have prompted producers to adopt a cautious stance, favoring only occasional sales. Safras & Mercado reports that despite higher prices for arabica and pulped natural, movement remains slow, with producers carefully evaluating the situation. This suggests that while the Brazilian physical market may stay buoyant, supply could remain limited as producers await a clearer picture of the climate’s impact on next year’s harvest.

Source: Notícias Agrícolas