On Wednesday, coffee prices went down due to favorable drier weather conditions in Brazil that boosted the crop’s harvesting process.
Coffee futures for its September delivery declined by -0.23% to $161.48 per pound on July 26’s Asian afternoon session.
According to Somar Meteorologia, the Minas Gerais region in Brazil did not receive any rain last week. The favorable weather pattern helped speed up the harvest, which is bad for prices. Besides, the region is responsible for 30.00% of the arabica crop.
Based on a coffee export cooperative, the harvest in the country was 50.50% completed as of July 14. As a result, it was ahead of the 42.80% completed progress from the same period last year.
Moreover, the Brazilian real’s weakness pushed a long liquidation of contracts on Tuesday after declining from a 13-1/2 month high. A lower real rate sparks up export selling from the country’s producers.
On the other hand, lower supplies of the commodity benefit its value. The ICE-monitored robusta crop volumes dropped to 5,273 lots record low last Thursday. Furthermore, its arabica bean inventories fell to an eight-month low of 532,055 bags.
Also, tighter coffee supplies from Colombia pulled up prices. On July 07, its Coffee Growers Federation stated a drop in its crop’s exports by -20.00% year-over-year to 748,000 bags. Colombia is ranked as the second top producer of arabica beans.
Farmers Affected by Lower Coffee Prices
In the Morobe Province, coffee farmers in the Wau-Waria District were deeply affected by the lower prices of their crops.
According to some growers, they transported 45 bags of the dried product. They were forced to find buyers in Wau to purchase them for only low prices.
They said they traveled a long way from Waria to find decent buyers to purchase their harvests for low prices. Also, they could not travel to Lae to sell their coffee bags since it could lead to a loss.
As a result, they hired transporting vehicles to ship them to Lae. However, they were forced to find buyers in Wau instead due to lower prices.