Although it was anticipated that prices would fall this week, the magnitude of the retreat was greater than expected, especially as prices rose on both markets at the beginning of the week. Over the week arabica coffee prices lost 18.55 cents/lb, with the second position (May) closing at 315.35 cents/lb. Robusta coffee prices also fell but the decline was significantly less than was seen in the arabica market with values shrinking by $105/ton (4.75 cents/lb) with the March position closing at $4,037/ton. In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be between 140 and 145 toea/kg lower than they were last week.
The collapse during the latter half of the week appears to have been in response to weather forecasts which show that all coffee growing areas of Brazil will receive significant amounts of rainfall next week. The fact that robusta prices did not fall as heavily as arabica is probably due to the fact that the supply outlook for robusta is not as rosy as it appears to be for arabica. For although there is strong evidence that the crop in Vietnam is looking better than it has for some time, the conillon crop in Brazil is looking a bit more fragile due to less favourable weather earlier on in the season for many conillon growing areas in Brazil especially in EspÃrito Santo. Another reason for the collapse this week might be due, in part, to the release of consumption data from ABIC which shows that Brazil’s internal coffee consumption shrunk by over 2% to 21.4 million bags in the 12 months to October 2025, down from 21.9 million bags over the same period in 2024. Per‑capita consumption fell even more shrinking from 5.01 kgs in 2024 to 4.82 kgs per person in 2025, a 3.79% decline. This is the first meaningful contraction seen since 2022 and may well be a clear indication that higher prices are beginning to impact demand. However, it is also interesting to note that the Brazilian coffee industry’s internal‑market revenue jumped from R$36.82 billion in 2024 to R$46.24 billion in 2025, up over 25%. In other words, roasters earned significantly more despite selling slightly less.
Once again I cannot get access to any reliable regularly-published data on price differentials, so have to rely on sources which may not be entirely accurate or up to date. Physical price differentials will not have had time to adjust to the falls seen later in the week but still most quotations appear to have either strengthened or stay unmoved this week. Brazilian 3/4’s are up 2 cents at minus 13; while Honduras HGs are steady at level, similarly Kenya AB FAQ’s are steady at between plus 35 and plus 45; while Colombian UGQ’s are up a cent at plus 26. My best guess is that PNG Y1’s might be unmoved at around minus 9, but as always this is just a guess. Thus, assuming that my guesses are not too far from the mark, it should have been possible for an exporter to fix on Friday in New York for April/May delivery at a price somewhere between 306.05 cents/lb and 319.45 cents/lb. The latest Commitment of Traders’ report shows that speculators and managed funds have increased their short position while at the same time reducing their long position. This suggests that they anticipate further price falls. Indeed all the evidence points that way especially with the rain forecast for next week, although the longer term forecasts suggests that it may be drier and certainly hotter thereafter. Nevertheless the downward momentum looks set to continue and it looks highly likely that prices will be lower next week.
Source:
Mick Wheeler, UK.
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