Weekly Market Report – 10 May 2026

Weekly Market Report – 10 May 2026

Although the week started off on a positive note, the prospect of a large harvest in Brazil together with heavy origin selling forced arabica prices sharply down on Thursday. There was a small bounce on Friday but nowhere near enough to make any indent on the previous losses. Over the week arabica coffee prices lost 12.10 cents/lb, with the second position (July) closing at 274.80 cents/lb. Robusta coffee prices, however followed a different path reflecting concern over falling stock levels and managed to gain $50/ton (2.25 cents/lb) to finish the week at $3,414/ton (July). In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be between 110 and 115 toea/kg lower than they were last week.

It is difficult to pinpoint exactly why arabica coffee prices came under pressure this week as there was no news that was particularly bearish, indeed what there was should probably have been seen as bullish. On Friday ICE arabica coffee inventories fell to a two and half month low of 477,045 bags, although more significantly ICE robusta inventories also fell over the week to a 16.5-month low of 3,724 lots, which is probably why robusta prices managed to make a small gain. The European Commission published its long-awaited report on the simplification of the revised EU Deforestation Regulation (EUDR) this week. These revisions were supposed to provide additional clarity to stakeholders and while they addressed some important issues, they failed to address the major concerns that have been expressed by producers. Even so, the Commission expects that annual compliance costs for companies will be cut by about 75%, when compared to the original EUDR. The update also includes a commitment from the Commission to update the Information System in order to reflect the changes introduced by the revised Regulation and at the same time enhance the user friendliness of the system. However, there are still doubts over differences produced by the various satellite imaging systems and on how the volume of data required to cover shipments from small producers will be handled. Nevertheless, it is fairly obvious that while the multinational exporters and importers will probably cope with the regulation when it enters into force at the end of the year, smaller exporting and importing companies will struggle.

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. Physical price differentials appear to be largely unmoved this week with Brazilian 3/4’s continuing to be quoted at minus 10. Honduras HGs remain at plus 18, while Kenya AB FAQ’s are steady at between plus 47 and plus 50; Colombian UGQ’s, are however, slightly higher at plus 38. As a result, I suspect that PNG Y1’s may be steady at around plus 7/8. If this is still correct, then, it should have been possible for an exporter to have fixed on Friday in New York for July delivery at a price somewhere between 279.35 cents/lb and 285.45 cents/lb.

Although it was anticipated that prices would trend lower, the nature of the price movements seen throughout the week suggests that the markets remain very nervous. It is still very early in the Brazilian winter season, but it is at about this time of the year that market participants start to watch weather forecasts very closely. There is a cold front forecast to hit Brazil the week after next, but at the moment no frosts are anticipated. The Brazilian harvest is starting in many areas, and early reports suggest that good yields are being seen. Consequently, the outlook is for further falls in prices unless something happens on the weather front.

Source:

Mick Wheeler, UK.

Latest Posts