Tightening Global Coffee Stocks Drive Price Increases

The Barchart report highlights a rise in coffee prices driven by the reduction in certified stocks at ICE in New York. Despite a significant annual increase in stocks compared to the previous year, the cut of 640 bags recorded last Thursday reinforces the perception of a tightening global supply. This shortage continues to pressure coffee prices, particularly arabica, which saw significant gains in futures contracts. The 470-point increase in the December/24 contract confirms the market’s concern over the balance between supply and demand.

Robusta also experienced a price hike, with the November/24 contract rising by $49, reflecting the same trend of global stock shortages. This upward movement in both coffee varieties suggests that the supply constraint is impacting the entire sector, regardless of the differences in quality profiles and markets served by arabica and robusta. Ongoing climate uncertainty in producing regions, combined with steady demand, continues to fuel speculation that prices may remain high for an extended period.

In the Brazilian domestic market, the increase in the price of Arabica Type 6, especially in producing cities like Machado/MG and Franca/SP, shows that the global shortage is also affecting local producers. The rise in prices for Pulped Natural coffee in regions like Campos Gerais/MG underscores the direct link between the international market and Brazil, the world’s largest coffee producer. This steady price growth in the physical market indicates that producers are benefiting from global conditions but must remain vigilant to market volatility in the coming months.

Source: Notícias Agrícolas