The turmoil in all markets continued this week as uncertainties surrounding new tariffs continued to impact global trade. Coffee markets were not exempt with both markets falling heavily on Monday, drifting down mid-week, only to rebound strongly on Friday in response to the announcement that the tariff rates were being reduced to 10% for most countries for the next 90 days, except for China. So, what looked like being a bad week, was better than expected, but still not good, with the second position (July) closing at 353.60 cents/lb, down 9.70 cents/lb. Robusta coffee prices followed an almost identical path losing $153/ton over the week. (6.95 cents/lb). In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be between 75 and 80 toea/kg lower than they were last week.
It should also be mentioned that the fall in the value of the dollar over the latter half of the week would also have been a massive supportive factor. Although many other currencies such as the Colombian Peso also lost value over the week. Another supportive factor would have been the news that there was a significant reduction in green coffee exports from Brazil in March. The latest data from the Brazil Coffee Export Association (CeCafe) showed that Brazil exported 2.95 million bags of green coffee in March, down 26.5% from the same month last year. Arabica exports totalled 2.8 million bags, down 10.7% while conillon (robusta) exports totalled 138,582 bags, a decline of 83.9% year on year. Since the start of the 2025 calendar year, total green coffee exports now total 9.7 million bags, down almost 13% compared to the first three months of 2024. Nevertheless, some of this week’s weakness can probably be attributed to the fact that it is raining heavily in most coffee growing areas of Brazil with Minas Gerais receiving almost double what it would expect at this time of the year.
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. The current volatility is making physical trade problematic, with the fall in market values tending to strengthen most physical price differentials quotations. Brazilian 3/4’s are higher at minus 11; as are Honduras HG’s at plus 4, Kenya AB FAQ’s, remain unmoved at between plus 20 and plus 25; while Colombian UGQ’s are higher at plus 5. I can only assume, therefore, that PNG Y1’s are probably also higher at around minus 5, but, as always, this is just a guess. Thus, had an exporter fixed on Friday in New York for July delivery he may have been able to secure a price somewhere between 335.05 cents/lb and 350.95 cents/lb.
Hopefully we will see a return to calmer market conditions this week but that may well be wishful thinking. More rain is forecast for Brazil this week which will be beneficial for the crop, but most analysts believe that the earlier dry weather has caused irreparable damage already. Still the rain should help swell what beans there are on the trees and thus gives greater credence to those forecasts which suggest that the crop will be close to 60 million bags, although CONAB and IBGE are still maintaining that the crop will be closer to 50 million bags. Even at 60 million bags the supply/demand balance is going to be tight going forward, so the outlook remains relatively promising. Indeed, the immediate outlook is for prices to finish the coming week higher, but they may not recover all that they lost this week.
Source:
Mick Wheeler, UK.