Coffee Market Closes Thursday with Decline Amid Currency Pressure and Weather Expectations

The coffee market closed Thursday (31st) with significant declines on international exchanges, with futures contracts for Arabica and Robusta dropping by over 1%. Price pressure was amplified by the weakening of the Brazilian real, which hit a nearly three-month low against the dollar, encouraging exports from local producers. This currency devaluation makes Brazilian coffee more competitive in the global market, boosting supply and consequently pushing prices downward.

Moreover, the forecast for heavy rains in Minas Gerais could impact future Arabica supply expectations. While rain is essential for maintaining productivity, the anticipated heavy rainfall in Brazil’s main coffee-producing state raises uncertainties. Excessive rain could compromise bean quality or hinder access to farms during harvest. In Vietnam, despite the passage of tropical storm Trami, coffee plantations were not significantly affected, with only 5% of the harvest impacted, providing some temporary relief for Robusta supply projections.

In the Brazilian physical market, prices also declined. Arabica-producing regions, such as Campos Gerais and Espírito Santo do Pinhal, reported price drops for both Arabica Type 6 and Pulped Natural varieties. This decrease reflects not only international pressures but also a lower-than-usual pace of trade for this time of year, as noted by Escritório Carvalhaes. With currency and climate shaping market perspectives, producers and investors remain cautious, closely watching weather impacts over the coming weeks and currency market volatility.

Source: Notícias Agrícolas