Late Rains and International Outlook Impact the Coffee Market: Recovery Prospects and Challenges

The anticipated rains for Brazil’s coffee-growing regions, particularly in the West and South, are being highly anticipated, as they are crucial for the flowering and development of the upcoming harvests. However, as analyst Eduardo Carvalhaes pointed out, while these rains are essential, they will not fully reverse the damage already caused by the prolonged drought. The dry conditions have already compromised a portion of the crops, and their impact will continue to be felt, despite a potential slowdown in losses once the rains arrive.

On the international stage, the coffee market experienced moderate losses, with declining prices for both arabica and robusta in the New York and London exchanges. The outlook for a more intense La Niña, bringing wetter conditions to Southeast Asia, could exacerbate problems in Vietnam, a country that has already been hit by Typhoon Yagi in September. Heavy rains continue to threaten crops, and Vietnamese coffee exports are expected to drop significantly, further impacting global supply and increasing market volatility.

Domestically, the Brazilian physical coffee market showed little change, with slight declines in the main producing regions. Arabica and pulped natural coffees recorded devaluations, reflecting the external pressure from the international climate situation and the uncertainty surrounding the recovery of global supply. Even with the forecasted rains, the recovery of Brazil’s coffee sector will still face challenges due to the adverse conditions encountered in the current cycle.

Source: Notícias Agrícolas