On Wednesday, coffee prices increased as Brazil encountered below-normal rainfall, rebounding from recent losses.
US coffee futures for December delivery climbed by 0.56% to $5,502.68 per metric ton (MT) on October 30’s afternoon session.
Based on reports, the cost of the commodity is moderately higher after incurring upsets in the previous sessions.
Prior to this, a soft Brazilian real plummeted to a more than two-month low against the strong US dollar, weighing on prices. Correspondingly, coffee farmers were forced to export selling due to the weak real in the country.
Nevertheless, the grain already recovered following concerns of below-average shower activities. In line with this, the agricultural sector would experience smaller crops, which underpins the prices.
According to Somar Meteorologia, the Minas Gerais state received only 25.10 millimeters of rain last week. At the same time, the precipitation in the largest arabica-growing region of Brazil is only 74.00% of the historical average.
Additionally, extreme weather conditions in the country led to longer-term crop damage problems. Due to the consistent drought, coffee trees were damaged during the crucial flowering stage.
Subsequently, the Conab forecasting agency reduced its 2024 outlook from 58.80 million bags to 54.80 million bags. Likewise, this reduced the projected output rate of Brazil for the 2025/26 season.
Vietnam Posts Top Revenue for its Coffee Industry
The coffee industry in Vietnam achieved a significant feat after export revenues for the crop during the 2023/24 season peaked.
Consequently, the country achieved record levels despite the production volume plunging.
As indicated by the Vietnam Coffee-Cocoa Association (VICOFA), the country shipped almost 1.45 million tonnes of coffee from 2023 to 2024.
In line with this, export value jumped by over 30.00% amid a decreasing volume by 12.70%, reaching an industry record.
Furthermore, VICOFA vice chairman Do Ha Nam stated that this is the first time that the Vietnamese variety of the grain topped globally.