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Coffee prices, which reached record highs this year, declined by more than 10 percent in May, becoming one of the products that upset investors the most in the commodity market.
According to the information compiled by Anatolian Agency (AA) correspondent, the expectation that global supply will boost caused sharp declines in coffee prices.
Expectations that the world’s leading coffee producers will boost their production forecasts were an important factor in the decline in prices.
The US Department of Agriculture estimates that Brazil’s 2025/26 coffee production will soar by 0.5 percent annually to 65 million bags and Vietnam’s 2025/26 coffee production will soar by 6.9 percent annually to 31 million bags.
Coffee prices have been negatively affected by ongoing concerns about economic growth, which have triggered demand concerns.
Brazil’s national food supply agency Conab also reported that the country’s 2025 coffee production is expected to total 55.7 million bags, up 7.5 per cent from the January forecast.
On the Intercontinental Exchange (ICE) commodity exchange operating in the US, the price of coffee per pound fell by more than 10 percent compared to the end of April to 3.58 dollars.
Soaring prices negatively affected demand…
The price per pound of coffee hit a record high of 4.30 dollars this year…
The high temperatures and lack of rainfall in Brazil had reduced the flowering of coffee trees and reduced the yield.
Another reason for the rise in coffee prices was Vietnam. Due to weather conditions in Vietnam, production declined last year. The fact that prices have risen so much globally causes buyers to remain relatively hesitant.
The fact that long-term purchases were relatively postponed due to the high prices also had a negative impact on coffee demand.
On the other hand, coffee production in Colombia reached its highest level in 29 years, accelerating the decline in prices. The increase in coffee yield in Colombia, the world’s third largest coffee producer, the expected rains in Brazil and the abstention of coffee producers to buy coffee due to high prices led to profit sales in coffee prices.
London-based Fastmarkets Agriculture Senior Analyst Tore Alden, who provides commodity price reporting services in agriculture, forest products, metals and mining markets, stated that coffee prices have increased significantly due to weather problems in some production areas, especially in southern Brazil.
Stating that weather-related risks may disappear with the end of La Nina, Alden said, “However, given the general concerns about inflation, there may be a significant amount of institutional investors investing in commodity markets, which may extend the time required for the risk to disappear.”
“Unless there is a structural change in production or demand, it seems more likely that coffee prices will continue to fall,” Alden added…
By Burhan Sansarlıoğlu,
www.aa.com.tr
