Coffee Market Faces Declines with Rising Dollar and Forecasted Rain in Brazil

On Thursday (17), the coffee market experienced widespread liquidation, driven by the rising dollar, which reached its highest level in two and a half months. The strengthening U.S. dollar puts pressure on commodity prices, including coffee, making Brazilian exports more competitive and encouraging sales. Additionally, forecasts of rain in Brazil, which could ease drought conditions in major producing regions, contributed to the price drop, with sharp declines in both robusta and arabica on international exchanges.

Robusta saw significant devaluation, with steep declines in its futures contracts, reflecting expectations of improved weather conditions in Brazil. Arabica followed this trend, with substantial losses in December, March, and May 2025 contracts. However, concerns about the 2025 harvest persist, as farmers and agronomists indicate that even with good flowering in the coming weeks, drought damage could still limit production potential. This keeps the market on edge, especially considering the recent history of supply failing to meet global demand.

In the Brazilian domestic market, the situation was mixed, with both increases and decreases in arabica and peeled cherry prices across various producing regions. While some areas, such as Machado/MG, saw slight appreciation, others like Espírito Santo do Pinhal/SP experienced declines. Adverse weather remains a key factor in price fluctuations, and the upcoming rains are expected to play a crucial role in determining the course of the harvest and price movements in the coming weeks.

Source: Notícias Agrícolas