Coffee Market: Rains in Brazil and EU Law Postponement Impact Future Prices

The coffee market experienced sharp declines on international exchanges this Wednesday, reflecting the impact of recent rains in producing regions of Brazil. These rains, though modest, brought relief to the soil at a crucial time for coffee plant flowering, which helped ease price pressures. The prospect of postponing the implementation of a European Union (EU) law, which could affect the certification of coffee stocks, also contributed to alleviating supply concerns, resulting in a significant drop in Arabica and Robusta coffee prices on the futures markets.

The decline was particularly notable for Robusta, which saw a devaluation of more than 6%, with the November 2024 contract falling by $334 per ton. Arabica was also impacted, with drops of up to 765 points in the December 2024 contracts. This downward movement reflects the relief provided by the rains but also highlights the market’s fragility in response to any signs of improvement or deterioration in weather conditions. Additionally, the possibility that the postponement of the EU law could allow the use of certified European stocks helped reduce fears of an immediate coffee shortage, reinforcing the downward trend in prices.

In the domestic market, the effects of international exchanges were evident, with Arabica Type 6 and pulped natural showing declines in various producing regions, such as Guaxupé and Varginha. Prices, already on a downward trend, were further pressured by global devaluation. Brazilian producers must remain attentive to changes in weather conditions and international regulations, as these factors continue to play a decisive role in price fluctuations and the viability of their commercial operations.

Source: Notícias Agrícolas