Coffee prices have, for the most part, traded sideways for the past two weeks, although the trend has been downwards. Over the last 3 days however, that downward momentum has increased, so much so, that arabica coffee prices ended the fortnight down 23.20 cents/lb with the second position (September) closing at 339.80 cents/lb. The robusta market followed a similar path losing $350/ton (15.20 cents/lb) over the fortnight. In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be between 180 and 185 toea/kg lower than they were two weeks ago.
This downward pressure appears to have emanated from a number of different factors. Rain in Brazil, which falling at this time of the year would normally be expected to delay the harvest, has been interpreted by the market as being beneficial to the development of the crop. I would have to say that this is certainly not a given by any means, but it may help to swell the beans. Certified stocks are increasing in volume, although the increase seen is not enough to really enough in itself to make any significant impact. Yes, arabica coffee certified stocks reached a 15-week high of 892,468 bags on Friday, but that total is only marginally above the levels seen the week before. Similarly , robusta stocks certified against the London market rose to an 8-month high last Friday of 5,438 lots, but that is also only a little higher than they were the week before. An additional factor may have been the growing body of evidence that the high prices are having a negative effect on demand. In Korea, where consumption is as high as 512 cups per person per year, the National Tax Service published data this week that showed that as of March 2025, the country had 95,337 cafes, a decline of 743 stores on the number that were recorded as being in operation at the same time last year. Furthermore, the All Japan Coffee Association reported this week that in February, Japan imported 26,955,859 kgs of green coffee, a decline of 16% from the 32,074,666 kgs imported in the same month last year. However, it has not all been bad news as the Strauss Group (a global Israeli based coffee manufacturing business) released its financial statements for the first quarter of 2025, reporting that sales of coffee had grown to approximately NIS 3 billion, which is 15.5% higher than in the same quarter last year.
As I am travelling and have not had any access to price quotations or other market reports I cannot update the situation regarding physical price differentials. Two weeks ago they were as follows: Brazilian 3/4’s minus 13; Honduras HG’s plus 5, Kenya AB FAQ’s at between plus 30 and plus 35; and Colombian UGQ’s at plus 7. I guessed that PNG Y1’s were around minus 3. If this is still the case, then had an exporter fixed on Friday in New York for August/September delivery he may have been able to secure a price somewhere between 335.75 cents/lb and 345.00 cents/lb.
The decline in prices was probably inevitable, although it is also clear that the market remains extremely nervous about the size of the current harvest in Brazil. Picking of the arabica crop has only just begun in some areas but very little has been heard about how it is progressing, although it appears that the robusta (conillon) harvest is progressing well and so far, there are no reported concerns. However, if the rain continues, there is a possibility that it will interrupt the harvest and/or affect quality. Furthermore, in Colombia, heavy rain has been reported as significantly reducing output in some regions of the country. Given all these factors, the outlook is somewhat difficult to predict, but the fact that prices have been falling for the past two weeks almost non-stop, has to be a major concern. On balance I suspect that we might see a bit of a recovery this week but not by much.
Source:
Mick Wheeler, UK.