On Friday, coffee prices decreased on forecasts of good weather patterns in Brazil, reducing concern about frost.
Coffee futures for September delivery dropped by -1.04% to $168.48 per metric ton on June 23’s Asian afternoon session.
The excellent weather conditions would allow farmers to resume their harvest. There were updated estimates for dry patterns this week despite experiencing heavy rains the previous week. It delayed Brazil’s harvest.
According to Somar Meteorologia, there is no sharp drop in temperatures for the next 15 days. As a result, the weather would be suitable for harvesting and drying beans.
It added that the Minas Gerais region in Brazil received 23.40 mm of rain on June 18. It equated to 411.00% of the historical average. Besides, the Brazilian region is accountable for 30.00% of the arabica coffee crop.
Moreover, a cooperative export group announced that Brazil’s harvest was 21.70% complete on June 16. It is ahead of the 13.50% completed amount in the same period the previous year.
In addition, the US Department of Agriculture projected that Brazilian 2023/24 arabica production would climb. The output would be higher by 12.00% year-on-year to 44.70 million bags.
Furthermore, the USDA mentioned that almost all areas that produce coffee are in the negative year of the cycle. On the other hand, rainfall volumes contributed to growing regions.
USDA Sees Higher Coffee Production
On Thursday, the USDA said global coffee production for 2023/24 would grow. The output climb would be from 4.30 million 60.00-kg bags to 174.30 million bags.
Higher volumes in Brazil and Vietnam balance out the decline in Indonesia. It added that Brazil’s production would climb to 3.80 million bags by 2023/24. Vietnam is seen to produce 1.60 million bags more, while Indonesia would drop by 2.20 million bags.
Also, global coffee consumption is forecasted to rise to a record 170.20 million bags from 168.20 million bags. The USDA anticipates a more extensive production of arabica beans while it expects a lower one from robusta.
Additionally, they speculate higher imports in the two primary coffee-consuming regions: the European Union and the US.