MILAN – Coffee futures prices rallied to new historic highs on Thursday, September 26th. In London, the main contract for November delivery posted its fourth straight day of gains adding 1.8% to close at $5,527 a ton (intraday at 5,575), once again a new all-time high for the 10-T contract. Prices are in strong backwardation. The main contract has gained $468 (+9.3%) so far this week.
The Ice Arabica coffee futures, also in positive territory for the fourth consecutive session, rose 480 points (+1.5%) to close at 273.90 cents per lb, its highest level in 13 years.
Similar to London, the New York market was up 9.2% from Monday to yesterday.
The weather situation in Brazil and Vietnam continues to heavily influence both coffee markets.
Brazil is facing its worst drought since 1981 and the weather forecast is not encouraging. Models suggest that the much needed rain – necessary to necessary to trigger the flowering season – will not arrive in substantial quantities until mid-October.
If the rainfall is adequate and well distributed in the following weeks, the outlook will likely improve, but the damage already done to the crops by the drought is irreparable.
Reports from the field tell of an increasingly critical situation almost everywhere, starting with Minas Gerais, Brazil’s largest Arabica producing state.
According to a survey led by Sistema Faemg (Minas Gerais Agricultural and Livestock Federation), the sample of more than 1,700 rural producers surveyed expects an average reduction in the 2025/26 Arabica season of around 23%.
This figure is all the more worrying in the light of the corrections made by most analysts and specialist institutions, including Conab, to this year’s Minas Gerais Arabica crop figures.
The survey was carried out in four growing regions of the state: Montanhas de Minas, Sul de Minas, Chapada de Minas and Cerrado Mineiro.
“Among other things, we have observed difficulties in flower setting and floral abortion, surge in pests and diseases, smaller beans and defoliation,” explains Ana Carolina Gomes, an analyst at Sistema Faemg, in an interview with Revista Cafeicultura.
“All these factors have affected the 2024 harvest in Minas Gerais and – combined with the current prolonged drought – could also have consequences for the 2025 harvest.”
Cecafé’s latest reports highlight the resilience of Brazilian coffee exporters amid significant infrastructure and logistical challenges, particularly at the local ports.
According to Cecafé estimates, persistent blockages and delays in loading led Brazil to accumulate 1.861 million 60kg bags of coffee that were not shipped in August. This resulted in a loss of foreign exchange earnings of $477.41 million.
