Coffee Posts Moderate Losses on Forecasted Rain for Brazil
Coffee prices have fallen, with Arabica coffee falling to a 1-1/2 week low and Jan ICE robusta coffee closing down -45. Brazil’s green coffee exports have increased by 24% YoY to 4 million bags, while shrinking ICE coffee inventories are supportive of coffee prices. Brazil’s Minas Gerais region received 0.8 mm of rain in the past week, which accounts for 30% of Brazil’s arabica crop. Vietnam’s agriculture department projected a 10% drop in coffee production in 2023/24 due to drought, while Rabobank projected an 18% YoY increase in Brazil’s exports in the 12 months ending June 2024. The U.S. Climate Prediction Center declared an El Nino weather event, which is likely to be supportive of coffee prices. Global coffee exports are shrinking, with the International Coffee Organization reporting a -5.7% YoY drop in Oct-Jul. The USDA Foreign Agricultural Service forecasts a 2.5% YoY increase in 2023/24 coffee production, with a 6.9% increase in arabica production and a -2.4% decline in robusta production.
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Source: Coffee Talk