Rain forecast in Brazil drives down coffee prices in NY

International coffee prices are heavily influenced by crop conditions in Brazil, the world’s largest exporter of arabica coffee. On Monday, with the forecast of rain in coffee-growing regions, December grain contracts fell 4.93% on the New York Stock Exchange, reaching $2.4465 per pound.

“There are many factors that led to this price drop, but the most prominent is the prospect of rain in Brazil’s producing areas. While the return of moisture is welcome, it won’t fully recover the losses,” said Haroldo Bonfá, a top executive at Pharos Consulting.

The chart used DataLiner data, a foreign trade intelligence service developed by Datamar, to compare Brazil’s coffee shipments (measured in TEUs) from the Port of Santos in the first eight months of the last four years. See more details below.

Coffee shipments from Santos | Jan-Aug 2021 vs. Jan-Aug 2024 | TEUs

Source: DataLiner (click here to request a demo)

According to Brazilian meteorological company Climatempo, starting this week, a cold front moving from the South of Brazil is expected to bring rain to areas in the Southeast and Central-West. In addition to adverse weather conditions, the potential postponement of the European Union’s anti-deforestation law also pressured coffee prices, as it may reduce the demand from importers.

“Brazil has been exporting at a very strong pace and is expected to close September with 4.4 million bags [shipped]. If there are changes to the European law, we might see this demand pressure ease a little,” Mr. Bonfá noted.

Source: Valor International 

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