Market Reports

The weather forecasters are indicating cool dry weather across the vast regions of the Brazil coffee growing areas for the remainder of this week, a relatively normal forecast as this largest producer country heads towards the seasonal drier winter months to come.  The Brazil Real has appreciated by 4.40% since the beginning of April and settled around the high for the year against the US Dollar, yesterday.  The Brazil Real strength to the US Dollar can traditionally discourage selling activity within the interior of Brazil, as returns to producers are diluted in Brazil Real terms, however, one might note that producers are relatively well financed and continue to take a measured stance despite this, with the prevailing Brazil coffee export year drawing to a close. The new robusta harvest already underway in the Conilon areas, to be followed shortly by the arabica harvest. There is limited incentive for internal selling activities to become more aggressive within the current coffee futures market environment.

Ethiopia, Africa’s largest producer of arabica coffee, is estimated to produce around 8.50 million bags in the current October 2025 to September 2026 coffee year.  This leading Africa arabica producer and exporter points to another strong year, with shipments of green coffee potentially reaching 7.50 million bags, with demand resilience evident in relatively new market Saudi Arabia, as well as established consumer markets such as Germany, and Japan.

With another strong export performance expected for the cumulative 2025/26 export season, along with an internal domestic consumption that is estimated at between 3.50 and 4 million bags per annum, there is limited carryover stocks held in country, the earlier to come to market washed coffees are already indicated to be quite well sold.  Traditionally natural coffee can be expected to start to flow to markets soon, and overall, the forecasts suggest Ethiopia’s new crop could reach about 8.25 million bags.

Meanwhile logistical challenges persist throughout the region, and the lack of regular transit via the Red Sea corridor disrupts export channels for this country’s shipments via neighbouring Djibouti. Adding to these pressures, fuel shortages are emerging as a growing concern, slowing the movement of coffee from washing stations to Addis Ababa and further tightening supply chains. On the political front, renewed strife in the northern region of Tigray has recently made international headlines, challenging the framework of the 2022 peace arrangement signed with the federal government.

Africa’s top producer of robusta coffee, Uganda, also fourth-largest exporter of robusta to non-producing consumer markets, is expected to record a rise in output during the October 2025 to September 2026 coffee year. Industry estimates place total production at around 8 million bags, consisting of roughly 7 million bags of robusta and 1 million bags of arabica. The country’s exports from the current season have thus far totalled 3.05 million bags, of which their main market Italy, has thus far reported imports of 802,726 bags.

Looking ahead to the October 2026 to September 2027 season, Uganda’s production is forecast to increase further to approximately 8.50 million bags, largely driven by conducive weather and the national endorsement of the expansion in the robusta segment.

To the south, Tanzania appears set to meet the earlier forecast 1.45 million bags of coffee in the October 2025 to September 2026 season, the production split almost equally between arabica and robusta coffee. Exports from this crop year should, with minimal internal consumption and value addition in the domestic market, reach 1.35 million bags. The primary export consumer markets for Tanzanian coffee, Germany and Japan.

Looking ahead to the development of the 2026/27 coffee harvest, the forecasts are for a steady output ahead. The weather has been thus far conducive, and good rainfall recorded across key growing regions. However, logistical constraints remain a concern, particularly ongoing congestion, shipping delays, and limited equipment availability at the Port of Dar es Salaam.

In coffee consumer news, Keurig Dr Pepper and Nestlé USA have extended and expanded their strategic partnership to strengthen the manufacturing and distribution of Starbucks K-Cup pods across the US and Canada, building on their initial 2020 agreement. The renewed deal, announced yesterday, introduces additional initiatives aimed at driving distribution growth and product innovation within the Keurig brewing system, reinforcing the platform’s role in the at-home coffee segment.

The Certified washed Arabica coffee stocks held against the New York exchange decreased by 3,686 bags yesterday, to register these stocks at 518,497 bags, with 74.29% of these certified stocks held in Europe, at a total of 385,206 and the remaining 25.71% being held in the USA at a total 133,291 bags. Of this, a total 21,763 or 4.20% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 25.77% of these certified coffees, from Honduras at 133,613 bags and 13.86% from Peru at a total 71,872 bags. The pending grading stocks increased by 825 bags on the day, registering 28,573 bags pending grading, the majority origins pending grading Honduras and with washed Uganda a tenderable quality, this adds up to 82.87% of the total.

The July 2026 to July 2026 contract arbitrage between the London and New York markets widened yesterday, to register this at 136.30 Usc/Lb. This equates to 47.37% price discount for London robusta coffee.

It was a mixed but overall softer day the commodity markets yesterday, ahead of continued talks in the Middle East, while the US Dollar firmer by 0.2% on the day, a firmer Dollar is traditionally seen as a bearish indicator for commodities traded in other currencies. The Corn, Soybean, Sugar and Wheat markets ended the day on a firmer note, while the Coffee, Cocoa, Gold, Silver, Palladium and Platinum markets ended the day on a softer note. The day starts with the U.S. Dollar trading at 1.351 Sterling, at 1.174 to the Euro and with the US Dollar buying 4.954 Brazil Real.

The London market opened the day on a softer note yesterday, followed by New York on a modest near to unchanged note at the start of the day. The direction in London was set early, to see the London market drop back and track gradually lower, as the early morning progressed. The New York market continued to trade on negative territory for the remainder of the morning session.  The activity in both markets was modest as the morning progressed with New York tracking lower by midday, with the London market following suit to set a new low for the day. As the afternoon progressed both the London and New York markets recovered from the lows of the morning to trend back towards par. The London market traded in softer territory for the remainder of the days’ session. The New York market was also seen to trade back towards par. This support continued through to the close, with the New York market trading back towards par to settle on a softer note at the close with half of the earlier losses of the day intact. The London market was seen to settle on a softer note at the close, with more than half of the earlier losses of the day intact.

The London market ended the day on a negative note, with 59.67% of the earlier losses of the day intact, while the New York market ended the day on a likewise negative note, with 53.97% of earlier losses of the day intact.  This softer close for the markets, does little to inspire confidence, albeit that the markets recovered from the lows of the day during what was a choppy session, and one might think that the markets are due for a steady start to early trade today, against the prices set yesterday, as follows: