MILAN – Coffee futures prices suffered significant losses in the first session of the week, with Robustas falling to their lowest levels in two months and Arabicas reaching to a 12-day low. In London, the most traded contract for January delivery lost $112, ending the day at $4503. In New York, the December contract fell 560 points to 251.70 cents.
Pressure on coffee futures prices was exerted by the arrival of rains in Brazil, which are conducive to the flowering of the new Arabica crop (2025/26).
In London, speculators are scaling back their net long position ahead of the harvest in top Robusta producer Vietnam, which should gather pace next month.
According to weather reports from Brazil, the coffee belt has received good amounts of rain over the past week and forecasts anticipate new rainfall for the coming days in Minas Gerais.
Will this be enough to save next year’s harvest? Insiders have quite different opinions. In a LinkedIn post, the head of coffee for a major trader appears optimistic. It looks like we are going to have a good (very good?) crop,” said Octavio Pires, head of coffee in Brazil for Chinese trader COFCO, commenting flowering in the country.
The authoritative Brazilian agricultural analyst Safras & Mercado, on the other hand, urges caution, pointing out that the unfavourable climatic conditions of the last few months will in any case have an impact on the development of the harvest.
The Brazilian media report the testimony of a grower in IlicÃnea (southern Minas Gerais) that the flowering in many plantations in the area is now compromised and that, in some cases, the flowers will not even open.
On the Robusta side, the harvest season in Vietnam is approaching and the prospect of the new crop coming onto the market has helped push futures prices lower.
However, the expectations for the 2024/25 coffee season remain pessimistic due the consequences of last spring’s drought.
According to some sources, climate change could drastically reduce available commercial farmland in the Vietnam over the coming decades.
The World Coffee Research predicts that the global Robusta market could face a deficit of up to 35 million bags by 2040.
