Bloom or Bust? A Simple Map to Arabica’s Near-Term Price Paths
Weather Risk Watch: Where Arabica Prices Could Land Next (3 Scenarios)
If you buy physical containers (no futures trading) like we do, weather in key origins is your leading indicator. This week’s setup in Minas Gerais, Brazil shows a dry start to October with soil moisture still low—followed by a potential return of rain mid-month. That split picture creates three practical paths for near-term Arabica pricing:
Caption: Scenario price targets for Arabica (ICE KC) under mild, mid, and severe weather stress. The dashed line marks a $4.00/lb reference.
What the chart says—in one minute
Scenario A (Mild): If mid-October rains verify, risk premium can ease. Indicative street price zone lands around $4.17–$4.26/lb.
Scenario B (Mid): Patchy rainfall and ongoing soil stress keep risk premium firm—about $4.42/lb.
Scenario C (Severe): Poor rainfall realization pushes a stronger supply shock—about $4.63/lb.
How a physical buyer should act (no futures needed)
Stagger purchases (2–3 tranches per origin) to keep flexibility as rain data comes in.
Diversify origins (e.g., BR/CO for arabica + VN/IDN/UGA for robusta) to backfill volume if one region underperforms.
Contract smart: Weather contingency, PSI (SGS), flexible laycan, and a clear Price-on-Arrival model for clients.
Watch these dials daily: accumulated rain & soil moisture (BH/Varginha/Patos de Minas), container slots to Dubai, freight/insurance quotes, and origin FX vs USD/AED.
When weather turns, execution beats speculation. Use the data, pace your buying, and keep your Jebel Ali logistics tight.
