Coffee prices have decreased as the Brazilian Real’s weakness corresponds with forecasts projecting a rise in global coffee production for 2024/25. The USDA anticipates a decrease in Brazil’s coffee inventories and a potential shortage in arabica coffee during the 2025/26 marketing year, amid heightened production estimates in other regions.
On the commodity market today, May arabica coffee (KCK25) has decreased by 0.70 cents to close at 0.19% lower, while May ICE robusta coffee (RMK25) has dropped by 23 cents, amounting to a decline of 0.43%. Following an initial rise, coffee prices declined as the Brazilian Real projected a 4.0% annual increase in global coffee production for 2024/25, totaling 174.855 million bags. This production includes a 1.5% rise in arabica output to 97.845 million bags and a substantial 7.5% increase in robusta production reaching 77.01 million bags.
In summary, the Brazilian Real’s decline has negatively impacted coffee prices as forecasts indicate a significant increase in global coffee production for the upcoming season. With reduced Brazilian production estimates and a projected record low for ending stocks, the coffee market faces potential long-term deficits. The projected arabica coffee shortage further complicates the market’s stability going forward.
Original Source: www.tradingview.com
