Coffee prices fell on Friday as the Brazilian Real weakened, with arabica and robusta closing down. Production forecasts indicated an overall increase in global coffee output for 2024/25, despite predictions of decreasing inventories. The 2025/26 marketing year outlook shows a cut in Brazil’s arabica production estimate due to drought conditions, leading to concerns over potential deficits.
On the previous Friday, coffee prices experienced a decline, with May arabica coffee closing down by $0.55 or 0.15%, and May ICE robusta coffee dropping by $46, a decrease of 0.86%. The downturn followed a revision of coffee production projections by Brazil, forecasting an increase in global coffee production by 4% year-on-year for 2024/25, reaching 174.855 million bags. This includes a projected rise of 1.5% in arabica production to 97.845 million bags and a 7.5% increase in robusta production to 77.01 million bags.
In summary, the coffee market is responding to shifting production forecasts, particularly from Brazil, suggesting an increase in coffee output but also tighter global inventories. The USDA predicts a decline in ending stocks and a significant reduction in Brazil’s arabica coffee production estimates due to ongoing drought conditions. This situation points towards ongoing volatility and potential future deficits in the coffee market.
Original Source: www.tradingview.com
