Coffee Market Reaches Historic Highs with Adverse Weather and Reduced Stocks

The global coffee market closed Thursday with strong gains in coffee futures, driven mainly by unfavorable weather conditions in key producing countries. Arabica reached a 13-year high in the December contract, with a significant increase of 480 points, closing at 273.90 cents/lb. This rise was fueled by fund purchases, anticipating a possible reduction in global supply, particularly due to the water crisis affecting producing regions like Brazil and Vietnam. Robusta followed this upward trend, reflecting a broad increase in international prices.

Another factor influencing the market was the drop in certified coffee stocks on the ICE in New York, which fell by 1,140 bags, although they remain considerably higher than at the same time last year. This decline in stocks, coupled with uncertainties about future production, has added pressure to prices, which continue to rise. The global supply shortage, worsened by climatic problems, suggests that the coffee market will continue facing volatility in the coming months, especially with growing demand and low stock levels.

In the Brazilian domestic market, prices also showed positive fluctuations, though more modestly. Producers have been using hedging strategies to protect against the water crisis, resulting in slight increases in the prices of arabica and pulped cherry in various regions of Minas Gerais. This caution among producers reflects the uncertainty caused by adverse weather conditions, which continue to impact supply in the physical market, keeping quotations relatively stable but still at elevated levels.

Source: Notícias Agrícolas