Coffee prices on both markets came under pressure all week although both markets did see a short-lived small bounce on Thursday, before continuing their downward path on Friday. Arabica coffee prices finished the week 6.35 cents/lb lower, with the second position (March) closing at 374.85 cents/lb. Robusta coffee prices followed suit losing all of last week’s gains and more, falling by $235/ton (10.65 cents/lb) with the March position closing at $4,178/ton. In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be about 50 toea/kg lower than they were last week.
It is difficult to pinpoint why prices retreated this week but, while not the cause of the downward pressure, the release of USDA attaché reports on some of the key origins should have been more helpful. Of note was the report on Brazil where the attaché saw Brazilian output for 2024/25 (Jul/June) at 65 million bags, while the 2025/26 harvest has been forecast at 63 million bags 3% lower than they think was produced this year. Arabica is seen at 38 million bags, down 13%, but conillon (robusta) output is put at 25 million bags up almost 19% on this year’s output. Brazilian consumption is estimated at 22.28 million bags. For Vietnam, the attaché is forecasting a crop of around 30.8 million bags with robusta put at 29.6 million bags and arabica 1.2 million bags. Colombia’s crop has been forecast at around 13.8 million bags, while Indonesia’s is put at 12.5 million bags, up from their previous estimate of 11.3 million bags. Robusta production is put at 11 million bags while arabica output is put at 1.5 million bags. India’s 2025/26 coffee crop has been forecast at just over 6 million bags, which is unchanged from their previous forecast. Arabica output is expected to total 1.35 million bags and the robusta crop has been estimated to reach 4.7 million bags. Domestic coffee consumption in India has been projected to remain unchanged 1.36 million bags
I still cannot get access to any reliable regularly-published data on price differentials, so once again, I have had to use sources, the accuracy of which cannot be guaranteed. And this week there have been very few updated price lists produced so it is difficult to give an up-to-date picture. So last week Brazilian 3/4’s, were quoted at minus 22; Honduras at plus 5, Kenya AB FAQ’s at between plus 25 and plus 40; Colombian UGQ’s at between plus 16 and plus 20. Without really knowing how physical price differential have moved this week I can only guess that PNG Y1’s might be unmoved at around minus 10, but I must stress that this is very a guess. Thus, had an exporter fixed on Friday in New York for March/April delivery he may have been able to secure a price somewhere between 363.25 cents/lb and 368.40 cents/lb. This week’s downward move was by and large unexpected especially as it is difficult to pinpoint why this is so. This is all the more surprising as the latest Commitment of Traders’ report shows that the large funds and speculators increased their net long position by 2,565 lots to 15,287 for the week ended November 25. This would suggest that they too expected prices to rise. The USDA figures present a mixed bag but of note is their forecast for Brazil which is certainly on the low side vis-à -vis commercial trade houses, although still higher than official Brazilian sources. There is therefore a conflicting outlook with considerable uncertainty about the overall supply/demand outlook but also some significant selling pressure. On balance I think that we may see a small rise next week but not by much.
Source:
Mick Wheeler, UK.