Arabica futures ended higher Friday on lower estimates for Brazilian coffee production

MILAN – StoneX has also revised downwards its estimate for Brazilian coffee production. The leading American financial services company released a new report on Friday, forecasting a smaller Brazilian crop in 2024/25 than originally expected, with production now estimated at 65.9 million bags, 1.7% lower than the first estimate published in February.

Despite this downward revision, production will still be 2.5% higher than last year’s, at 65.9 million bags, up for the third year in a row – a rather rare historical occurrence, and an exception to the normal two-year harvest cycle caused by the ups and downs of Arabica production.

Arabica production is forecast at 44.7 million bags: 4.6% higher than last year and 1% higher than the February preliminary estimate mentioned above.

More negative, however, are the forecasts for Robusta. Production is now estimated at 21.2 million bags: 1.6% less than last year and 6.8% less than the first estimate.

This lower-than-expected harvest is the consequence of the drought that hit the production areas of Espírito Santo and Bahia between September and November.

As a result, the production forecast for Espírito Santo has been reduced by 8% to 14.9 million and for Bahia by as much as 11.5% to 2.3 million.

StoneX experts point out the great disparity of results in Sul de Minas. Some areas performed well, even better than expected, while others – in particular some areas of the Cerrado Mineiro and Mogiana (São Paulo) – suffered more from the drought occurred at the end of last year, the report says.

Arabica futures recovered in the last session of the week. In New York, the main contract for September delivery gained 325 points in Friday’s session, closing at 230.50 cents. Influencing the performance was Honduras’ export data in particular.

According to the Honduran Coffee Institute, the top Central American coffee producing country exported 610,669 bags in July, down 11% from the same month last year. In the first 10 months of the current coffee year, exports totalled 5.6 million, similarly down by 11%.

September ICE Robusta Coffee edged up by $2 to $4227.