Arabica hits fresh 13-year high on smaller Brazilian supplies
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While there is no official estimate on the amount of coffee Brazil currently has in inventory, there is growing speculation that exports could slow in the coming months.
PHOTO: PIXABAY
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BRASILIA – Arabica prices touched a fresh 13-year high as traders weigh how much coffee can still be sold this season from Brazil, the world’s top grower, and as concerns mount over the nation’s next harvest.
Coffee shipments from Brazil have been strong in 2024, but now traders are reporting that producers are reducing their offers. While there is no official estimate on the amount of coffee the country currently has in inventory, there is growing speculation that exports could slow in the coming months.
“There are about eight months before the start of the next season, and the percentage of coffee sold by Brazilian growers is very high,” said Mr Carlos Santana Jr, a Brazil-based commercial director at trader Ecom Group. “We might not have enough coffee to get to the next season.”
Consultancy Safras e Mercado calculated that 70 per cent of the latest harvest was already sold as of Nov 12. That compares with roughly 64 per cent in the previous season.
A strong pace of exports out of Brazil also led the US Department of Agriculture’s Foreign Agricultural Service to this week reduce its estimate for stockpiles of coffee in Brazil. Inventories are seen reaching only 1.2 million bags when the current season ends in June. That is a 26 per cent decrease versus 2023.
There is also growing concern over the outlook for the upcoming harvest. The market is watching for signs of stress in coffee trees after a period of extreme dry weather earlier in 2024 that could have reduced the potential output for next season. BLOOMBERG
