On Tuesday, coffee prices declined, erasing the previous session’s gains amid Brazil’s global oversupply and the country’s frost shortage.
The commodity futures for September delivery closed the trading session by dipping -3.48% to $232.48 per pound.
According to reports, the plummet came after Brazil’s Cecafe disclosed that the country’s green coffee exports rose 26.00% annually to 3.40 million bags. The lack of frost in Brasilia also contributed to bearish coffee prices, which protected the crops from damage.
Furthermore, harvest pressures in the country have also affected the recent price decline. Reports highlighted that Brasilia’s 2024 to 2025 coffee output was 92.00% completed as of last week, faster compared to 2023’s 86.00%.
Meanwhile, Rural Clima disclosed that extensive frost will likely occur on Tuesday in Brazil’s coffee-growing areas, which caused their prices to rise in the last session.
Moreover, Robusta’s largest producer, Vietnam, reported sluggish exports, which favor the commodity’s prices.
The General Department of Vietnam Custody revealed that Hanoi’s exports last month dipped by 29.30% yearly to 76,982 metric tons.
According to reports, the country’s drought caused the export drop. Vietnam Coffee Association also expected that Hanoi’s 2023 to 2024 crop exports would dip by -20.00% annually to 1.33 million metric tons.
Brazil’s Robusta Exports Ease Vietnam Coffee Supply Shortage
According to reports, traders noted that the brisk export rate of Robusta coffee from Brazil was helping to alleviate the limited supply from Vietnam.
Furthermore, they are carefully tracking the weather in Brazil, where light cold occurred in coffee-growing regions over the weekend. There is also a possibility of more frost on Tuesday.
Meanwhile, analysts observed that the situation feels highly uncertain, with the damage not being as severe as initially feared. However, the market is likely to remain extremely sensitive and reactive, at least until the weekend.
As global coffee prices have peaked, solid shipments from Brazil and other major producers could alleviate supply and price concerns.
