Brazil’S 2020 crop and weaker dollar push coffee prices down

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Arabica coffee ended up falling on the NY exchange, changing its performance level downwards. The market is pressured by the arrival of Brazil’s 2020 crop. The rise in oil and the relief in markets, with the gradual resumption of activity in Europe and the United States, have not been able to reverse coffee losses. The record production along with the dollar at historical levels sustain Brazilian growers’ selling interest, which plays against prices.

The result of easing the isolation in Europe and the United States, once the peak of the pandemic is gone, will serve as a guide to financial markets and, therefore, must still bring some short-term volatility to coffee. The progress of the Brazilian crop, which is expected to take shape with arabica from May, must drive the behavior of coffee prices worldwide.

Even though the market has already priced the large crop that will be reaped in Brazil, there is room for some negative fine adjustment, given the confirmation of the forecast of record production – Safras projects 68.10 million bags. However, anything other than a record and good quality crop must give rise to an upward correction in price levels.