On Tuesday, coffee futures prices closed lower on improved precipitation in Brazil, easing concerns about dry weather conditions.
US coffee contracts for September deliveries declined by -2.89% to $241.55 per metric ton on July 16’s Asian afternoon session.
According to analysts, Brazil’s Minas Gerais region, responsible for 30.00% of the country’s arabica crop, gained 4.60mm of rain last week.
Last Friday, the region’s 2024/25 harvest was reported to be 66.00% complete, 59.00% faster than last year. It also topped the 62.00% five-year average.
The ICE-monitored robusta coffee supplies increased to a one-year high of 6,065 lots on Friday, jumping from 1,958 lots in February 2024. Also, its arabica beans inventories hit a 16-month high of 842,434 bags, better than its 24-year low in November 2023.
Another bearish factor for coffee prices is the International Coffee Organization’s (ICO) accelerated forecast. They projected that the 2023/24 global production would climb by 5.80% year-over-year to 178 million bags amid an impressive off-biennial crop year.
In addition, the ICO’s outlook for the global 2023/24 coffee consumption will rise by 2.20% YoY to 177 million bags.
On the other hand, the organization reported that global May shipments increased by 9.80% year over year to 11.8 million bags.
Brazil Coffee Harvest Advances Quickly
Brazil’s coffee harvest, the top producer in the world, progressed faster than normal this year. It reached 60.00% for arabica and 80.00% for robusta; however, yields were smaller than expected.
Based on exporters, the market consensus for a robusta crop is 10.00% smaller, while the arabica can be 5.00% lower than initially thought.
According to Consultancy Safras & Mercado, it may slash its estimate for robusta coffee between 8.00% and 14.00%.
Moreover, some farmer unions stated that the state of Espirito Santo’s robusta production could experience a 35.00% drop. Also, Sao Paulo state expected a 30.00% loss.
