Coffee Market Surges with Strong Gains Driven by Global Demand and Crop Failure in Vietnam

The coffee market experienced an unexpected movement this Monday, with strong gains in both New York and London, while other commodities did not follow the same trend. According to analyst Lúcio Dias, the reduction in short positions by funds and the subsequent entry of roasters into the market to cover future positions drove this appreciation. This shift indicates a change in market behavior, leading to an unforeseen bullish scenario for coffee.

Heberson Sastre, manager at Minasul, highlighted that the fundamentals of supply and demand were also crucial for this movement. Global coffee consumption growth, record exports, and tight inventories were key factors behind the futures price increase. The expectation of strong demand through the first quarter of 2025, coupled with supply shortages, has created a significant upward pressure on prices, reflecting the market’s strain.

Additionally, the forecast of crop failure in Vietnam added further support to the rise in coffee prices. Vietnam’s production is expected to decrease by 5 to 15%, increasing uncertainties surrounding global supply. In the Brazilian domestic market, both arabica and pulped natural coffee showed considerable increases in various producing regions, confirming the upward trend and the influence of international factors on the appreciation of the bean in Brazil.

Source: Notícias Agrícolas