Devaluation of Arabica Coffee with Accelerated Harvest and Decline in Exports

The arabica coffee futures market began the week with a decline in the main contracts on the New York Stock Exchange, influenced mainly by the accelerated harvest in Brazil and weather conditions in other producing regions. The September/24 contracts fell 290 points, closing at 222 cents/lb, and other maturity dates also recorded significant declines. This movement suggests that market volatility will continue as the progress of the Brazilian harvest and weather conditions in key origins influence prices.

The rapid progress of the harvest in Brazil was a crucial factor putting pressure on arabica prices. Safras & Mercado consultancy reported that 29% of the 2024/25 coffee harvest in Brazil was completed by June 4, a faster rate than the previous year and above the five-year average. This acceleration could increase market supply, contributing to the devaluation of futures contracts. In London, robusta also declined but remained above $4,000 per ton, indicating similar pressure in the global coffee market.

Internationally, Reuters data indicated that Vietnam's coffee exports fell by 5.8% in the first five months of the year, with a sharp drop of 47.8% in May compared to the previous month. This reduction in exports from the world's largest producer and exporter of robusta coffee could impact the global market but has not yet been enough to reverse the observed downward trend. In Brazil, despite the international market devaluation, coffee prices remained stable in the main trading regions, reflecting internal resistance to external volatility.

Source: Notícias Agrícolas