• Arabica futures rose 1.6% for the week, closing at US¢ 323.85/lb
• In London, prices ended the week practically unchanged
• Cepea Index: Arabica rose 2.4%, and Robusta increased by 1.7%
• Since mid-December, coffee futures have been trading sideways
• Weather and production estimates in Brazil remain key focal points
• Harvest progress and the Lunar New Year in Vietnam are points of attention
• Cecafé's export report will be released on Wednesday, the 15th
Coffee futures prices ended last week with mixed results. After a decline in the previous week, Arabica futures closed higher, with the most active contract rising by 520 points (+1.6%) to US¢ 323.85/lb. In London, the most active contract registered a slight decline of USD 2/ton, resulting in a week with little variation.
On Monday, prices showed high volatility, with different performances across markets: New York recorded an increase of 315 points (+0.97%), reaching US¢ 327.00/lb, while London showed a decrease of USD 49/ton (-0.99%), quoted at USD 4,917/ton at the time of writing this report. Price fluctuations were mainly driven by technical factors and speculative agents.
Weekly intraday (most active contract) – 01/06 to 01/10
In Brazil, coffee prices closed the week higher, driven by concerns over domestic supply and a strong U.S. dollar. The Cepea index for Arabica rose 2.4%, reaching BRL 2,287.88/bag. Meanwhile, the Robusta index showed an increase of 1.7%, quoted at BRL 1,883.84/bag.
At the end of November and the beginning of December 2024, coffee futures experienced a sharp rally due to concerns about the weather and supply in Brazil for the 2025/26 crop. According to StoneX’s crop research report, Arabica production may suffer a decline of over 10% in the next season. However, since mid-December, with no major changes in fundamentals, prices have shown a sideways movement, although with significant volatility. Arabica futures fluctuated between US¢ 310/lb and US¢ 330/lb during this period. In London, despite a bearish trend caused by Vietnam’s harvest progress, prices remained above USD 4,800/ton, even with delays caused by heavy rains.
Evolution of coffee futures prices from the second half of 2024
Source: CommodityNetwork Traders’ Pro. Design: StoneX.
From a fundamental perspective, the scenario remains practically unchanged, with futures prices supported by expectations of lower supply in the 2025/26 crop in Brazil. In the short term, despite delays, Vietnam’s harvest progress is expected to put pressure on prices, particularly with the approach of the Lunar New Year, which will be celebrated on January 29, 2025. Historically, Vietnamese producers accelerate sales before this holiday, which is of great religious significance and the country’s most important celebration.
In Brazil, attention remains on weather conditions and production estimates for the next crop. StoneX has already started its field research and plans to release an updated estimate in mid-March. In addition to StoneX, other companies and institutions will also publish their forecasts, which are likely to have a significant impact on the market.
In recent weeks, weather conditions have been favorable for crop development. The losses caused by adverse weather during the 2024 flowering are irreversible, but maintaining suitable weather conditions is essential to ensure the development of unaffected fruits. Climate monitoring will remain crucial in the coming weeks.
Another important point is market participants' concern over consumption amid high consumer price inflation. Data from IBGE indicated that inflation reached 39.6% in the 12 months through December. In the U.S., data from the BLS showed that prices increased by 11.3% year-over-year through November. Despite uncertainties, there are concerns about how the sharp rise in prices will affect coffee consumption in 2025.
In the coming weeks, besides the aforementioned factors, market participants will closely monitor the release of Cecafé's export report, scheduled for Wednesday, the 15th. In addition to the December export data, the report will provide a consolidated overview of coffee exports in 2024.
TABLE OF INDICATORS
