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Coffee Prices Drop Amid Liquidation Pressure

by Jessica

Coffee prices saw a decline on Monday, with arabica coffee (KCK25) closing down by -4.45 (-1.14%) and robusta coffee (RMH25) falling by -154 (-2.70%).

The drop in prices comes amid ongoing long liquidation pressure, which pushed NY arabica coffee to a new 2-1/2 week low, reversing much of the rally that occurred between late January and early February. Arabica prices have been pressured in recent sessions due to a rise in ICE-monitored inventories, which increased to 792,695 bags on Monday from a nine-month low of 758,514 bags last week.

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On the other hand, robusta coffee inventories reached a 4-3/4 month high at 4,603 lots on January 31 but have since dropped to a 1-3/4 month low of 4,297 lots on February 18. On Monday, robusta inventories stood at 4,321 lots.

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Despite the overall downward pressure, there are some factors that have supported coffee prices. Below-normal rainfall in Brazil, the world’s largest arabica coffee producer, has provided some bullish support. Somar Meteorologia reported on Monday that Brazil’s biggest arabica coffee-growing region, Minas Gerais, received only 11.4 mm of rain last week, just 24% of the historical average.

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In addition, a higher percentage of Brazil’s coffee harvest has already been sold compared to previous years, signaling a tightening of supply. Safras & Mercado reported last Monday that 88% of Brazil’s 2024/25 coffee harvest had been sold as of February 11, ahead of last year’s pace of 79% and the 5-year average of 82%. However, sales of the 2025/26 crop have been slower, with only 13% sold, well behind the 4-year average of 22%. This suggests producers are holding back supply, which could support prices in the coming months.

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