Coffee prices have declined today, attributed mainly to a weakened Brazilian real and forecasts predicting an increase in global coffee production for 2024/25. The USDA anticipates significant changes in Brazil’s coffee production and stocks, indicating ongoing challenges in the market.
Coffee prices experienced a decline today, with May arabica (KCK25) dropping by $0.70 (0.19%) and May ICE robusta (RMK25) falling by $23 (0.43%). This downturn occurred after initial gains were erased, largely attributed to the Brazilian real and forecasts projecting an increase in global coffee production for 2024/25 by 4.0%, totaling 174.855 million bags. The predicted rise includes a 1.5% increase in arabica production to 97.845 million bags and a more significant 7.5% boost in robusta to 77.01 million bags.
In conclusion, the weakness of the Brazilian real, coupled with projected increases in global coffee production, has contributed to falling coffee prices. The USDA predicts a decrease in ending stocks to a 25-year low, exacerbated by a recent adjustment in Brazil’s coffee production forecasts. This trend signals ongoing challenges for the coffee market, particularly with expectations of deficits in arabica coffee production for several years ahead.
Original Source: www.tradingview.com
