Once again, the week started off on a positive note, but from then it was mainly all downhill with a small upward movement seen on Wednesday, which could not be sustained. The decline can be partly attributed to a weakening Brazilian Real, but also in response to slightly higher exports from Brazil. Over the week arabica coffee prices lost 7.90 cents/lb, with the second position (July) closing at 266.90 cents/lb. Movements in robusta coffee prices over the week were a little more muted, ending up roughly where they were two weeks ago losing $49/ton (2.25 cents/lb) to finish the week at $3,365/ton (July). In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be about 75 toea/kg lower than they were last week.
On Friday the Brazilian Real fell to a 5-week low against the dollar and therefore inevitably encouraged both exporters and growers in Brazil to start selling. Furthermore, the Brazilian Coffee Exporters Association (Cecafé) reported this week that Brazil exported 3.122 million bags of coffee in April, up just 0.6% compared to 3.105 million bags exported in April last year. The increase is thought to be due to the fact that the conillon crop is coming in early this year, although some reports suggest that coffee harvest is only advancing very slowly, with many trees still carrying a high percentage of unripe green cherries and with uneven maturation, which suggest that the quality may not be as good as in other years. Furthermore, exports for the first ten months of the Brazilian 2025/26 crop year (July/June), totalled 32.247 million bags, which is nearly 20% lower than was exported over the same period last year. The latest USDA attaché report forecasts that India’s 2026/27 coffee harvest will be around 6.14 million bags, comprising 1.56 million bags of arabica and 4.58 million bags of robusta. The reports notes that arabica output will probably be lower than last year as a result of below-normal monsoon rainfall combined with unusually high temperatures, which it is feared may adversely affect flowering and fruit set. In contrast, India’s robusta output is projected to remain largely unaffected at about the same level as last year. Domestic consumption is estimated to be around1.58 million bags.
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 again 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; as are Colombian UGQ’s at plus 38. As a result, I suspect that PNG Y1’s may also 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/August delivery at a price somewhere between 272.55 cents/lb and 285.00 cents/lb. I have been saying for weeks that there would be a major move downwards and thus this week’s further erosion in price has come as no surprise. The latest Commitment of Traders reports suggest that managed money, i.e. speculators and the large index and hedge funds have reduced their overall long position by over 6,000 lots. This is a massive movement and suggests that more falls can be anticipated. There is, unfortunately, no respite in the weather forecasts for Brazil, which suggest that temperatures will remain well above freezing until at least the end of the month. Consequently, it looks like prices will be lower again next week.
Source:
Mick Wheeler, UK.
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