October’s Weather and Flowering in Brazil Influence Coffee Prices

October was a month of lowered coffee prices across international exchanges, with both Arabica on the New York Stock Exchange (ICE Futures US) and Robusta on the London Stock Exchange experiencing declines. These changes stemmed largely from promising news of a strong flowering period in Brazil, suggesting potential growth for the 2025 harvest, as favorable rainfall became more regular and widespread.

The coffee market had recently reached a 13-year high in New York, driven by concerns about Brazil’s coffee outlook following a period of intense heat and prolonged drought in 2024. Some protective measures were implemented to safeguard crops. However, as the rains arrived and flowering began, market prices shed some of their earlier gains.

Brazilian Weather Supports Optimism for 2025

The regular rainfall, helping Brazil’s coffee trees flower, has created an optimistic view of the 2025 harvest size. However, experts still expect a production decline compared to earlier years, given the adverse weather in 2024. The impact of last year’s challenging climate lingers, as many areas remain sensitive to any further disruptions.

Adding to price pressures, the year-end brings the start of Robusta harvesting in Vietnam, as well as Arabica harvests in Central America and Colombia. Although Vietnam faced its own weather challenges, the timing of multiple harvests from significant coffee-producing regions typically places downward pressure on prices.

Dollar Strength, Exports, and Brazil’s Coffee Market Performance

The U.S. dollar’s appreciation against the Brazilian real also contributed to price declines. During October, the commercial dollar in Brazil increased by 6,1%, enabling Brazil to export coffee at competitive rates. This currency dynamic, coupled with record export volumes, further pressured coffee prices on the international market.

Looking ahead, November will see ongoing attention to Brazil’s climate, global harvests, and export flows. Additionally, with the U.S. elections on November 5 and potential shifts in interest rates, the global financial market’s movements could further influence commodity prices.

Decline in Arabica and Robusta Coffee Prices

On the New York Stock Exchange, Arabica coffee prices for the December 2024 contract fell by 9% over the month, dropping from 270,25 cents per pound at September’s close to 245,90 cents on October 31. Meanwhile, Robusta coffee in London saw an even sharper drop, with the January contract experiencing a 16,4% decline during the same period.

Conclusion: 

Looking to November, industry players should keep a close watch on Brazil’s climate trends, export activities, and potential financial market volatility. For buyers, this could be a moment to capitalize on lower prices, while sellers might consider waiting to see if production and weather conditions bring price stability or even a minor rebound.





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