On Thursday, coffee prices plummeted amid dollar rallies for a 2-1/2 month high and improved rain chances in Brazil, which may ease drought concerns.
In the Asian afternoon session, the US crop futures for December delivery slid by -1.67% to $2.55 per pound. London coffee futures for November contracts declined by -4.17% to $4,662.00 a metric ton.
According to reports, projections of better weather conditions in Brazil have undercut the recent gains in the commodity sector. Forecasts also revealed that precipitation will rise in the country for two weeks.
In addition, crop prices have been battered after the International Coffee Organization (ICO) showed that global exports surged by 6.50% year-over-year (YoY) to 10.92 million bags. Also, shipments worldwide from October to August climbed by 9.90% YoY to 125.67 million bags.
Meanwhile, Brazil’s green coffee exports increased by 34.00% YoY last month to 4.10 million bags. Reports revealed that these commodities’ shipments were consistent.
On the other hand, ICO revealed that global coffee production jumped by 5.80% to 178.00 million bags this season amid an unexpected off-biennial crop year.
The organization also said that consumption worldwide climbed by 2.20% YoY to 177.00 million bags, which resulted in a 1 million bag surplus.
USDA Bi-Annual Data Unfavorable to Coffee Prices
According to reports, the latest US Department of Agriculture (USDA) bi-annual data has been battering coffee prices.
The USDA’s Foreign Agriculture Service (FAS) forecasted that global coffee output in the 2024/25 season will surge 4.20% YoY to 176.24 million bags. This is a 4.40% rise in arabica output to 99.86 million bags and a 3.90 rise in robusta yield to 76.39 million bags.
Meanwhile, FAS anticipates that Brazil’s next season arabica production might increase by 7.30% YoY to 48.20 million bags on higher output and boosted planted acreage.
Furthermore, it projects that Columbia’s 2024/25 coffee yield will bolster by 1.60% to 12.40 million bags.