Weekly Market Report – 28 June 2026

The continuing rain in Brazil is beginning to delay the harvest, but it is also having an effect on quality, consequently the market has begun to react by pushing prices up.  Over the week arabica coffee prices gained a further 8.15 cents/lb, with the second position (September) closing at 275.95 cents/lb.  The robusta market did not however, follow suit and prices ended the week losing $36/ton (1.60 cents/lb) to finish the week at $3,556/ton (September).  In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably between 75 and 80 toea/kg higher than they were last week.

Although the delay to the harvest is being cited as the main reason why prices have moved ahead this week, it is not that far behind.  The latest Safras & Mercado report suggests that around 39% of the harvest has been picked so far, which is only slightly below the 43% pace recorded during the same period last year.  However, there are also reports that a much larger than normal percentage of the beans being harvested are considerably smaller than they were  last year.  This will clearly have an impact the volume ultimately harvested as well as on the quality of the crop.  It is, however, still relatively early days in the harvest so things could change.  The right-wing candidate won the Presidential elections in Colombia and as a result the FNC were able to negotiate a temporary extension to their operating contract.  This guarantees a degree of stability.  In a presentation made at the World of Coffee event in Brussels this week the European Coffee Federation reported on a study it had commissioned which showed that the total value of the coffee industry to the European Union plus the UK, Norway and Switzerland was €582.8 billion.  The value-added component of that total was €251.5 billion, and it was estimated the industry generated 4.7 million full time jobs, both directly and indirectly.  In turn the industry also generates on average around €77.5 billion for Governments through direct and indirect sales and labour taxes. 

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 have retreated a bit this week, but not by a lot.  Brazilian 3/4’s quoted at minus 18, down 4 cents/lb. However, Honduras HGs are up slightly at plus 24, Kenya AB FAQ’s are steady at between plus 55 and plus 60; as are Colombian UGQ’s at plus 55. It therefore seems likely that PNG Y1’s will probably be unmoved at around plus 10, but this is just a guess.  If this is still correct, then it should have been possible for an exporter to have fixed on Friday in New York for Sept/Oct delivery at a price somewhere between 272.80 cents/lb and 289.80 cents/lb.   The latest Commitment of Trader’s report suggests that the managed index funds have massively increased their long position by over 3,400 lots (up almost 10%), while at the same time reducing their short position by round 2,400 lots.  Such an investment turnaround is not something that can be ignored.  However, practically all the weather forecasters are predicting drier weather for the next 10 days which should bring the harvest back on track.  It is therefore somewhat difficult to reconcile what appears to be two opposing forces.  However, on balance I think the drier weather will prevail and as a result I expect prices to come under pressure and finish the week a bit lower, although I have been saying that for the last 2 weeks and got it wrong.        

Source:
Mick Wheeler, UK.

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