Weekly Market Report – 02 August 2026

Yet another week of huge fluctuations with arabica prices rallying strongly at the beginning of the week, retreating mid-week, only to end the week on another strong upward surge. Arabica coffee prices ended the week 16.60 cents/lb higher, with the second position (December) closing at 314.65 cents/lb.  Robusta coffee prices initially mirrored the movements in arabica prices, but failed to rally as strongly on Friday, so ended the week only gaining $37/ton (1.65 cents/lb) to close at $3,775/ton (November).  In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably between 155 and 160 toea/kg higher than they were last week.

The volatility can be attributed to the fact that the market is currently being pulled in opposite directions by two opposing forces.  The continued wet weather in Brazil is having a serious effect on the harvest, affecting not only the quantity of coffee being picked but also, maybe more significantly, the quality of the crop.  The harvest among members of Cooxupe co-op was 58.3% complete as of July 24, well behind the 67% harvested at the same time last year. This is exacerbating the short-term supply availability with roasters scrambling to find the coffee they require.  The volume of stocks certified against the New York market fell this week by over 47,000 bags to 264,179 bags, a two and half year low.  Counteracting this pressure is the large global surplus being forecast by various agencies.  Last week the USDA forecast a 10 million bag surplus while Hedgepoint Global Markets released a new estimate of the global coffee surplus for the 2026/27 season this week.  And although they lowered their forecast, they still estimate that the surplus will be around 8.2 million bags, rather than the 9.9 million bags they forecast earlier in the year.  They attribute the drop to the effect that the El Nino will have on production in many countries especially those that have already recorded irregular rainfall patterns, like Colombia and Indonesia.

Once again, I cannot get access to any reliable regularly-published data on price differentials, so I have had to rely on sources which may not be entirely accurate or up to date. Given the volatility seen this week, movements in physical price differentials have been somewhat erratic, so much so that it is difficult to report any quotation with any degree of confidence.  Last week Brazilian 3/4’s were quoted at minus 22, Honduras HGs at plus 25. Kenya AB FAQ’s at between plus 55 and plus 60; Colombian UGQ’s at plus 64. I guessed last week that PNG Y1’s were around plus 11/12.  If this is still about correct, then it should have been possible for an exporter to have fixed on Friday in New York for November/December delivery at a price somewhere between 316.05 cents/lb and 327.85 cents/lb.  

Despite the volatility it is interesting to note from the latest commitment of traders’ report that speculators and the managed funds continue to reduce their exposure to the coffee market, liquidating a further 1,388 contracts over the week up to Tuesday, cancelling out 559 long contracts and 829 short contracts.  Not really sure why, but as I said last week they clearly think they can get better returns elsewhere.  Drier weather is forecast for Brazil over the next two weeks which should speed up the harvest; in normal times this would put pressure on prices, but nothing is normal at the moment.  I tend to think that prices will probably go lower next week, but the volatility we have seen recently suggests that others think differently.  We will see – but expect continued volatility.    

Source:
Mick Wheeler, UK.

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