Coffee prices on both markets continue to be very volatile with prices falling relatively heavily on Monday, then staging a recovery throughout the middle of the week, only to fall back on Friday. Arabica coffee prices finished the week 5.55 cents/lb lower, with the second position (March) closing at 369.30 cents/lb. Robusta coffee prices probably came under greater downward pressure but did manage to inch upwards mid-week only to fall back down again on Thursday and Friday. Over the week robusta coffee prices lost $179/ton (8.00 cents/lb) with the March position closing at $3,999/ton. In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be about 40 to 45 toea/kg lower than they were last week.
The fall on Monday has been attributed to heavy origin selling but may also have been in reaction to the release of latest forecast from CONAB last Thursday, which raised its total Brazil 2025 coffee production estimate by 2.4% to 56.54 million bags, from its September estimate of 55.20 million bags. The recovery seen mid-week may have been helped by the release of the latest data from the Brazil Coffee Export Association (CeCafe), which showed that Brazil exported 3.3 million bags of green coffee in November, down 27.1% from the same month last year. Arabica exports totalled just over 3 million bags and robusta exports were 259,323 bags. Exports of green coffee for the first eleven month of the 2025 calendar year now total 33.4 million bags, down 22.2% compared to last year. The fall on Friday however may have been spurred on by the release of statistics from Vietnam’s National Statistics Office which reported that Vietnam’s coffee exports in November were 39% higher than in November 2024 totalling 1.47 million bags and that coffee exports for the first eleven months of the year rose by 14.8% y to 23.30 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. The latest quotes suggest that Brazilian 3/4’s are slightly lower at minus 23; but Honduras are steady at plus 5, as are Kenya AB FAQ’s at between plus 25 and plus 40; Colombian UGQ’s are quoted at plus 18. Given the fact that movements have been limited, I can only guess that PNG Y1’s might be unmoved at around minus 10, but once again I must stress that this is just 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 358.20 cents/lb and 368.95 cents/lb. Although there is ample rainfall forecast for most coffee growing areas of Brazil for the next 10 days, it is important to note that it is only around half of the volume of rain that would normally fall at this time of the year. However, it appears that the upcoming crops in both Brazil and Vietnam are developing well and whilst neither country is expected to produce a record crop, both will produce crops of a size which should help ease the current imbalance between supply and demand. So, the outlook is decidedly bearish, although it must be borne in mind that both crops are at an early stage of development and things could go wrong. Consequently, although it looks inevitable that prices will retreat further next week, the situation is not clear cut with doubts lingering about production levels in other origins. So yes, prices might ebb lower next week, but they should not collapse.
Source:
Mick Wheeler, UK.