Coffee Prices Surge: Market Rallies on Dollar Drop and Uncertainty Over 2025 Harvest

The international coffee market ended the week on a strong note, driven mainly by the sharp drop in the dollar index, which reached its lowest level in three years. This movement favored the short covering of futures positions and reignited investor confidence. Renewed concerns over global supply limitations—already strained by low stock levels and adverse weather conditions—became a decisive factor in sustaining high prices for both arabica in New York and robusta in London. The scenario reinforces the importance of market fundamentals amid broader macroeconomic instability.

Attention remains focused on Brazil’s 2025 coffee crop. Marcus Magalhães of MM Cafés highlights that even the most optimistic forecasts point to a shortfall between production and demand, with a potential gap of up to 12 million bags. Prolonged drought and excessive heat in Brazil, coupled with a recent dry spell (“veranico”) that affected bean development, are expected to further reduce productivity. This outlook, along with low global inventories noted by Escritório Carvalhaes, supports the thesis of firm prices in the medium term, as the balance between supply and demand appears increasingly fragile.

In Brazil’s physical market, prices followed the international rally, with significant gains in key producing regions such as Varginha, Franca, and Guaxupé for both Arabica Type 6 and pulped natural beans. However, despite rising prices, producers remain hesitant to sell, leading to a trading volume still below what’s needed to meet domestic and export demand. This seller reluctance reflects the sector’s cautious stance amid an uncertain future, where factors like climate, trade policy, and stock levels continue to drive the pace of business. Fonte: Noticias Agrícolas Com dólar em queda e oferta ajustada, café se volta aos fundamentos e fecha... - Notícias Agrícolas