On Thursday, coffee prices are being weighed down due to weaker demand after US economic data showed higher weekly jobless claims.
Coffee futures for July exports declined by -1.92% to $182.38 a pound on May 11’s Asian afternoon session.
Prices are struggling amid a rally in the dollar index into a week high. Also, the hints toward a slowdown in the US economy may affect demand for commodities like coffee.
Another bearish factor is the drier weather conditions in Brazil, which could improve the harvest pace. According to analysts, its Minas Gerais region gained 0.40 mm of rain in the week ending May 07.
For robusta, its prices are dropping due to the increase of its inventories to a five-month high.
On the other hand, the arabica crop’s outputs seen over the previous three months are facing a five-month low. It dropped down to 649,830 bags, which was posted on Wednesday.
In Indonesia, robusta coffee gained support from issues about heavy rains that would reduce yields in the country. Besides, it is the third top robusta producer in the world.
Additionally, the Asian country would drop production by -20.00% YoY to 9.6 million bags brought by damaging rains.
Moreover, coffee demand increased globally as roasters and consumers sought more affordable options due to high inflation.
Brazilian Coffee Exports Dropped
Based on a report from the Council of Brazilian Coffee Exporters, the country shipped 2.7 million bags last month. It is 10.30% less compared to the data from April 2022, which had $604.50 million in revenue.
The number of exports fell by 19.90%, and revenues declined by 25.00% to $2.41 million. In April 2023, fewer coffee bags were shipped compared to the previous month.
However, experts remained optimistic due to the excellent crop conditions and interest from importing countries.
Within the first four months of 2023, the US continued to be the primary destination of Brazilian coffee. It was followed by Germany, Italy, Japan, and Belgium.
