Coffee closes mixed amid supply, weather concerns

Arabica coffee prices closed higher on Friday, with March contracts rising by 0.39 per cent, supported by a weaker dollar and concerns over Brazil’s 2025/26 crop, Nasdaq reported on Sunday.

Safras & Mercado estimates Brazil’s arabica output will decline by 15 per cent year-on-year due to drought. Conversely, robusta coffee prices fell by 0.99 per cent, pressured by rising inventories and improved global exports.

Global supply dynamics remain mixed. The USDA forecasts a 4 per cent increase in 2024/25 coffee production to 174.855 million bags but projects a drop in ending stocks to a 24-year low. Meanwhile, Vietnam’s robusta harvest is challenged by rain, with November exports plunging 47 per cent year-on-year.

Brazil’s prolonged dry weather, the worst since 1981, is raising long-term concerns about its coffee crop, while El Nino effects in South and Central America are also under scrutiny. Robust global exports and higher Brazilian shipments add bearish pressure to the market.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama