Arabica Coffee Rallies on Brazil Drought and Weak Dollar
Fernando Maximiliano, StoneX Brazil Market Intelligence Manager, discusses the surge in arabica coffee prices and the global supply challenges driving the rally.
Key Takeaways
Global coffee stocks remain tight after years of drawdowns
Brazil’s arabica production faces sharp declines and weather risks
A weaker US dollar adds support to New York coffee prices
Global Stocks Keep Running Low
Maximiliano highlights that global coffee stocks have been falling since 2021, with more than 20 million bags used from reserves. Current production levels are insufficient to rebuild inventories, keeping the market tight.
Brazil’s Arabica Crop Faces a Steep Fall
Brazil’s arabica production has fallen by 18.4 percent, with unexpected frost in August adding further stress. This structural weakness continues to influence prices globally.
La Niña Threatens the Flowering Stage
Dry conditions during the flowering stage pose risks for the 2026 crop. “This will be the guide for the next price trend”. Forecasts suggest a strong chance of La Niña, raising concerns over delayed rainfall in key coffee regions.
A weaker US dollar is another factor supporting prices. As Maximiliano explains, “when we see the dollar falling against the Brazilian currency, it is less interesting for the farmers in Brazil”. This reduces supply and strengthens New York contracts.
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