MILAN – Forecasts of rain in the Brazilian coffee belt led to sharp falls in the coffee futures markets yesterday. In New York, the December Ice Arabica contract lost 4.9% to close at 244.65 cents. In London, the November contract for Ice Robusta fell 3.9% to close at $4,868.
Rain is forecast in all of Brazil’s major coffee regions this week, which should help trees to develop a good flowering, a key crop phase looking into 2025 production prospects. It remains to be seen, however, how trees would recover from Brazil’s worst drought in over forty years.
“The rains should cut losses (to production), but they will not bring back the full production potential,” said Brazilian brokers Carvalhaes in a weekly note quoted by Reuters.
“The fact is that rain has not yet effectively returned to Brazil and, even with its return, there is no guarantee of a change in the weather pattern that will ensure a good progress of the next crop” wrote Safras&Mercado in a commentary.
“In this sense, the current movement is only corrective and does not indicate, for now, a change in trend. Climate models indeed signal the break of the drought pattern, with growing moisture in Brazil this October, with a moister scenario intensifying in November and December,” added the authoritative agribusiness consultancy.
“The doubts regarding the consequences caused by the long period without rain and, mainly, by the above-average temperatures in Brazil, are beginning to be better assessed with the return of rain. In the case of robusta/conillon, blossoming occurred earlier, and what is on the radar is the regularity of the rain for fruit development. In the case of arabica, it is necessary for the rain to induce blossoming and, subsequently, a favorable climate to reduce abortion and ensure good fruit development,” ended S&M
