Coffee Market Records Gains Amid Climate Concerns and Reduced Stock Levels

The coffee market registered positive gains in both New York and London on Tuesday (24), driven by concerns over future production. Arabica coffee showed strong performance, with a +1.57% increase in the December 2024 contract, closing the session at 267.80 cents/lbp. Robusta also followed the upward trend, albeit more moderately, with a +0.68% rise in the November 2024 contract. These results reflect the ongoing uncertainty in the market, fueled by adverse weather conditions.

Climate conditions continue to heavily influence the market. According to analyst Haroldo Bonfá, the recent rainfall was insufficient to ease concerns over the 2025 harvest, as high temperatures have been damaging flowering, particularly in Brazil. Reports like the one from Hedgepoint suggest that both Brazil and Vietnam will have smaller harvests in 2024/25, which could lead to a fourth consecutive year of a global coffee deficit. Furthermore, global stock levels remain low, supporting prices and likely driving further increases in the coming months.

In the Brazilian physical market, producers are cautious, negotiating only as needed, which has also helped keep prices elevated. Arabica Coffee Type 6 saw gains of up to 2% in key regions like Machado/MG, while Pulped Natural Coffee recorded increases of up to 0.64% in Campos Gerais/MG. These trends reinforce the upward momentum in the domestic coffee market, reflecting concerns over limited supply and adverse weather conditions.

Source: Notícias Agrícolas