PRESS ROOM
Why have coffee prices fallen?
Thursday 10th November '22
Brazil is the world’s largest Arabica producer and exporter, and higher production tends to occur during an on-year of the biennial crop cycle. Brazil’s Arabica coffee-growing regions have received more than 160mm of rain since the start of September, putting the rainfall tally for the country’s upcoming on-year crop near totals seen during the same period in 2018, Brazil’s third highest production year. This strong start to the rainy season has lifted soil moisture levels in coffee-growing areas of Minas Gerais and Sao Paulo, Brazil’s top coffee production states, from their lowest level in 12 years to the middle of their normal historical range, as seen in Gro Climate Risk Navigator. A weaker Brazilian Real is also increasing the incentive for exporters to export coffee. Amid these improvements in growing conditions, coffee prices declined 25.8% in October approaching a 15-month low. It is worth noting that exchange monitored stocks are near a 23-year low which, coupled with the recent sell-off, could provide some support for coffee prices.