Coffee Market Closes with Mixed Results Amid Global Surplus Projections and Drought in Brazil

The coffee market ended Wednesday (18) with mixed results, reflecting the release of a new Rabobank report that projected global production of 174 million bags for the 2024/25 season, leading to a surplus of 1.3 million bags. This forecast put pressure on arabica coffee prices, resulting in modest declines in the December/24 and March/25 futures contracts. In contrast, robusta saw moderate gains, with increases across all major contracts, indicating resilience despite supply concerns in Brazil.

The forecast of robust global production contrasts with the delicate situation in Brazil’s crop, which has experienced below-average rainfall since April. Rabobank warned about the risk this drought poses to Brazil’s production potential for 2024/25. Despite the possibility of a global surplus, this creates tension in the market regarding the supply from the world’s leading coffee exporter. These combined factors are driving mixed price dynamics, particularly between arabica and robusta.

In the domestic market, prices also showed divergent trends. While Arabica Type 6 saw an increase in Machado/MG, there were declines in Campos Gerais and Guaxupé/MG. The Pulped Natural (Cereja Descascado) also recorded drops in Guaxupé and Poços de Caldas/MG. This volatility reflects both the adverse weather conditions and global supply expectations, keeping the Brazilian physical market in a cautious state.

Source: Notícias Agrícolas