Coffee Market Faces Declines Amidst Climatic Impacts and Production Drop

The global coffee market faced moderate declines on the New York and London exchanges this Friday (27), reflecting unfavorable weather conditions in key producing countries. Although coffee prices had strengthened in recent weeks due to concerns over global supply, both Arabica and Robusta saw declines in their future contracts. The December/24 Arabica contract dropped by 475 points, while Robusta for the same period fell by $45 per ton. This indicates a market correction after weeks of gains, influenced by climatic conditions and fluctuations in commodity markets.

Climatic effects are also directly impacting coffee production in Brazil. The Faesp report highlights that irregular rainfall and heatwaves in 2023 affected the blossoming of coffee trees, particularly Arabica, leading producers to anticipate harvesting to avoid further losses. However, this decision compromised bean development, resulting in lower-than-expected productivity, with Minas Gerais, the main Arabica-producing state, projecting a 6.1% reduction in yield. Conilon production has also been affected, with an estimated 3.6% decline compared to the previous harvest.

In the Brazilian physical market, coffee prices also showed significant drops, reflecting the global scenario. Arabica Type 6 coffee saw steep declines in key producing regions like Machado and Guaxupé, with prices around R$ 1,510.00 per bag. Pulped natural coffee followed the same trend, with drops in Guaxupé and Campos Gerais. These movements in the domestic market emphasize the pressure that producers face, from both climatic challenges and price volatility, which could impact the profitability of future crops.

Source: Notícias Agrícolas