Coffee Market Faces Declines with Long Liquidation and Climate Uncertainties for 2025

The coffee market started the week facing pressure from long liquidation, leading to declines in international exchanges for both Arabica and Robusta. After recent sharp gains, Arabica saw a 90-point drop in the December/24 contract, while Robusta experienced a $21 decrease in the November/24 contract. This liquidation reflects a natural market adjustment following previous increases, but concerns about future supply, especially due to adverse weather conditions, remain present.

Climatic issues, in particular, are raising concerns for Brazil's 2025 coffee crop. According to the Carvalhaes Office, the damages are already significant, and regular rainfall can only prevent further harm, without reversing the losses already incurred. Additionally, the global supply outlook is worsened by the expected drop of nearly 5 million bags in Vietnam, contributing to increased pressure on the international market, heightening uncertainties surrounding global coffee production.

In Brazil’s domestic market, despite the volatility, Arabica prices continued to rise, with several regions reporting increases. For example, Espírito Santo do Pinhal/SP and Machado/MG recorded gains ranging from 1.34% to 1.37%. However, the Cereja Descascado coffee saw a slight drop in Poços de Caldas/MG. The physical market remains firm, driven by uncertainty around the 2025 crop, which is prompting more cautious trading.

Source: Notícias Agrícolas