The sell-off which started a couple of weeks ago picked up pace this week with both markets slumping to new lows. Over the week arabica coffee prices lost 26.05 cents/lb, with the second position (May) closing at 289.30 cents/lb. Robusta coffee prices also fell although the scale of the decline was less dramatic than in the arabica market with values falling by $282/ton (12.80 cents/lb) with the May position closing at $3668/ton. In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be between 200 and 205 toea/kg lower than they were last week.
The cold weather forecast for Honduras and Guatemala last weekend, undoubtedly helped support the market late last week but the fact that temperatures did not fall below freezing, although came close, inevitably caused a large sell off on Monday. Furthermore, the markets were not helped by the release this week of CONAB’s latest estimate of Brazil’s 2026 coffee crop, which they forecast at 66.2 million bags, this is over 17% higher than what they estimate Brazil produced in 2025. They attribute this increase to the fact that 2026 will be an on-year in the arabica biennial cycle, as well as to favourable climate conditions across key regions, plus a renewed wave of investment in technology and crop management. As a result they expect national productivity to reach 28.5 bags per hectare, up 18%. This means that CONAB anticipate that arabica production will total 44.1 million bags, up 23% year on year while conillon production will reach 22.1 million bags, up 6%. The European Coffee Federation reported this week that European green coffee stocks increased slightly in December 2025 but remain significantly lower than levels recorded in 2022 and 2023. Total stocks across major European ports reached 458,801 tons at the end of December, up from 441,661 tons in November but well below the more than 700,000 tons recorded in early 2022. A report released this week suggests that while Starbucks remains the U.S. market leader, its share of coffee‑shop spending fell to 48% in 2024/25, down from 52% in 2023/24. Dunkin Donuts gained share as did Dutch Bros, Scooter’s Coffee, and 7 Brew.
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 appear to have strengthened this week in response to Futures market falls. Brazilian 3/4’s are up a further 2 cents at minus 11; while Honduras HGs are higher at plus 1, similarly Kenya AB FAQ’s are also higher at between plus 40 and plus 45; while Colombian UGQ’s are up at plus 27/28. My best guess is that PNG Y1’s might be higher at around minus 7, 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 May delivery at a price somewhere between 289.60 cents/lb and 296.45 cents/lb.
The latest Commitment of Traders’ report shows that speculators and managed funds have once again significantly reduced their long position while at the same time increasing their short position, although they still retain a sizeable overall net long position. This may explain why prices fell this week but the Funds and speculators were probably only reacting to the overall bearish tone that dominates both markets at the moment. It would be comforting to say that the continued falls have been overdone and that the market is due a correction but I fear that is not the case and that prices will continue to trend lower next week.
Source:
Mick Wheeler, UK.
Latest Posts
- Weekly Market Report – 08 March 2026
- Weekly Market Report – 01 March 2026
- Weekly Market Report – 22 February 2026
- Weekly Market Report – 15 February 2026
- Weekly Market Report – 08 February 2026
   Â