Weekly Market Report – 31 May 2026

As expected arabica coffee prices ebbed lower this week, but the journey downwards was certainly not linear. Even so, the decline was probably inevitable and reflected both the widespread sentiment that this year’s crop in Brazil will be large as well as the prospect of some sort of ceasefire extension in the Middle East which will open the Straits of Hormuz.  Over the week arabica coffee prices lost 6.10 cents/lb, with the second position (September) closing at 258.70 cents/lb.  Robusta coffee prices however, proved to be a little more resilient and ended the week up $37/ton (1.70 cents/lb) to finish the week at $3,347/ton (September).  In the absence of local market distortions, roadside parchment coffee prices in Papua New Guinea next week will probably be about 60 toea/kg lower than they were last week.

Overall, it was a very quiet week news-wise with the markets essentially left to their own devices.  Both markets experienced some volatility but not excessively so.  There was evidence of selling by the index funds which obviously put pressure on prices and the strengthening of the US dollar against the Brazilian Real also added some weight to that pressure.   In addition, many commodity markets reacted to the possibility of a ceasefire deal between the US and Iran by cautiously moving downwards.  Of significant interest to the coffee world is the Colombian Presidential elections taking place today.  No candidate is expected to get the 50% majority required for automatic election so it is expected there will be a run-off on June 21^st, but the race may signal a potential significant shift away from President Gustavo Petro’s security and agricultural policies.  The two main candidates are the far-left candidate Iván Cepeda, who is widely seen as representing continuity with the current President Petro’s administration and the far-right candidate Abelardo de la Espriella.  Both candidates are tied in the polls.  The current administration is keen to revise the contract with the FNC and in particular to gain greater oversight of the Colombian Coffee Fund.  The FNC’s 10-year contract with the Government will expire this year so this election could well have a significant impact on the way that the FNC operates.

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.  Indeed, none of the sources I usually access have been updated, consequently I can only report what they were last week. Brazilian 3/4’s were quoted at minus 10. Honduras HGs at plus 18, Kenya AB FAQ’s at between plus 47 and plus 50; Colombian UGQ’s at plus 39. I guessed last week that PNG Y1’s were unmoved 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 Sept/Oct delivery at a price somewhere between 265.30 cents/lb and 273.90 cents/lb.   Weather forecasters are predicting that a cold front will hit some of Brazil’s coffee growing areas next weekend but the temperatures being suggested make it clear that there is very little chance of a frost.  There has also been fairly persistent rain in some areas this week which is reportedly delaying the harvest in those areas.  However, neither factor is expected to have any real impact on the country’s output or the harvest overall.   Indeed, early reports suggest that yields are in line with expectations and the quality fair to good.  The outlook therefore is for prices to continue their downward path with both markets ending the week lower.    

Source:
Mick Wheeler, UK.

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