Coffee prices have recently increased due to reduced rainfall in Brazil, which threatens crop yields and overall supply. The situation is compounded by decreasing inventories in robusta and arabica coffees, leading to a more competitive market. Key reports indicate that Brazilian producers have sold a significant portion of their upcoming harvests earlier than usual, exacerbating supply concerns and supporting price increases.
Coffee prices have risen today due to below-normal rain in Brazil, which could impact crop yields. Notably, the Minas Gerais region, a significant arabica coffee area, received only 11.4 mm of rain during the week ending February 22—just 24% of the historical average. Brazil remains the largest producer of arabica coffee globally, further emphasizing the importance of weather conditions on its output.
The article highlights the interconnected factors affecting coffee prices, particularly focusing on Brazil’s rainfall, inventory levels, and production forecasts. Lower-than-average rainfall threatens coffee crop yields, while diminishing inventories have driven up prices. Data shows producers are selling coffee faster than previous years, tightening supply. The prolonged impacts from El Nino conditions may continue to affect South American coffee crops, signaling potential future price volatility.
Original Source: www.tradingview.com
