Arabica coffee in December closed the weekend session up 2.15 cents/pound and robusta coffee in November closed up $17 at $4,702/ton. Thus, summarizing the week, the New York market price has increased compared to the previous week, specifically, the price of Arabica coffee closed last week’s session at 257.30 cents/pound compared to last week’s closing session of 252. 05 cents/pound while the closing price of Rubusta coffee this week based on November prices is $4,702, down from last week’s closing price of $4,828/ton.
From a technical standpoint, Robusta prices have fallen continuously for the past 3 weeks and are likely to continue to fall further, while fundamental information is contributing to restraining the fall when news shows that the country’s rainfall is low. Brazil is forecast by Climatempo meteorologists that rain will be limited next week during a very important time when coffee trees need water to flower in Minas Gerais state, this is a more negative forecast than the forecast. Previously it was “widespread showers”, now it has been revised as “scattered showers”.
Excessive dryness in Brazil is expected to continue to keep market prices high because Brazilian rainfall has been consistently lower than average since April, and the market is hoping for rain in the near future. Summer is also the main flowering season for coffee trees in this country.
Somar Meteorologia reported on Monday that Brazil’s Minas Gerais region received 33.4 mm of rain over the past week, equivalent to the historical average.
The rain may have come too late for Brazilian coffee
Rain is falling across the coffee growing regions of top producer Brazil after one of the driest periods on record, but it may be too late for trees to fully recover before the new crop is harvested. , according to farmers and experts.
Production problems in Brazil and Asia due to adverse climatic conditions have kept supply below demand for three years. If the next crop in Brazil falls below potential, global supply could again fall short of demand.
“The next crop will not be big, we can already predict,” said Alysson Fagundes, an agronomist at the Fundacao Procafe coffee research institute in Minas Gerais, Brazil’s top coffee-growing state. damage”,
Farmers and agronomists in Brazil say the 2025 crop will be problematic even if rain helps plants flower well in the coming weeks.
Procafe collects data on the condition of coffee fields in Minas Gerais. At the end of September, soil in the south of the state – the main coffee-growing region – was up to 250 millimeters short of ideal rainfall, the data shows. It was the second-largest moisture deficit on record.
According to agronomists, coffee plants exposed to drought will have to use energy – when the rain returns – to produce leaves, instead of fruit. That means the chances of having a good amount of fruit after flowering are very small.
“The trees drop too many leaves,” said Jonas Ferraresso, an agronomist who advises coffee farms in the states of Minas Gerais and Sao Paulo.
“It’s difficult for them to have enough energy to develop fruit after flowering.”
Many farmers in Sao Paulo state have chosen to prune their trees because their condition is so bad, coffee grower Osmar Junior told Reuters.
Farmers use this technique to stimulate the tree to recover, but it means the tree will not produce fruit in the first year after pruning, only being able to produce again in 2026, the farmer said. said.
Analysts at Safras & Mercado Group reported that Brazilian growers sold about 62% of the estimated total production of 66.04 million bags from the current coffee crop. The sales pace is above the reported five-year average of about 60%. Meanwhile, Brazil’s domestic market is still in a tight supply situation, with producers continuing to sell coffee at a trickle rate, while exporters seek to pay premium prices for coffee producers. upcoming contract.
The weakening Brazilian Real to US Dollar exchange rate may continue to weigh on sentiment among local producers in the short term.
In general, the coffee market price situation next week will depend greatly on Brazil’s rainy and sunny weather reports.
Meanwhile, there are many weather reports from Vietnam saying that continuous rain will come to the Central Highlands this weekend and into the new week. This is when the world’s largest Robusta coffee producer begins harvesting the new coffee crop, which is calculated from October 2024 to September 2025. Traditionally, people would expect the rain to stop around this time. This makes harvesting easier.
On October 17, the Council of the European Union announced an agreement on the European Commission’s proposal to postpone the implementation date of the European Union Anti-Deforestation Regulation (EUDR), which was initially set to enter into force at the end of December 2024. Final approval will now need to be officially confirmed by a vote of the European Union Parliament, expected to take place on 13 November 2024. If the vote is in favor of postponing the implementation of the EUDR, the new implementation date will be 30 December 2025. This will provide additional time to ensure implementation of the regulations ran smoothly and effectively.
Kinh Vu (giacaphe.com)
