Coffee Market Faces Declines Amid Climatic Volatility and Low Stocks

The coffee market experienced significant declines in arabica and robusta futures prices on the New York and London exchanges this Tuesday (01). The expectation of rainfall in Brazil’s coffee-growing regions in the coming weeks has caused market volatility, with prices reacting to any signs of climatic improvement. Arabica saw a substantial drop of up to 610 points in December/24 contracts, reflecting a one-week low, while robusta followed the same downward trend, losing up to $53 per ton. This movement underscores the direct impact of weather conditions on coffee price determination.

Despite the declines, the Hedgepoint report highlights that coffee stocks remain low both in producing regions and consumer destinations. This factor keeps the market sensitive to supply changes, especially considering potential risks for the 25/26 crop. The lack of stock improvements heightens uncertainty, putting pressure on producers and buyers to make cautious decisions. As a result, market volatility is expected to persist, as any shifts in weather or supply could push prices up again, necessitating careful marketing strategies.

In the domestic market, prices are also falling, reflecting the international scenario. Arabica type 6 and peeled cherry registered declines in several regions, such as Patrocínio/MG and Varginha/MG. However, despite these uncertainties, the Brazilian market remains active, with producers conducting negotiations cautiously. As noted by analyst Eduardo Carvalhaes, there is some fatigue among producers, but there are still good opportunities for commercialization, reinforcing the need for appropriate strategies to navigate the current instability.

Source: Notícias Agrícolas