Market Reports

As the Northern Hemisphere’s commercial coffee industry has mostly returned to business following the traditional summer holiday period, consumer held coffee stocks are reportedly at historically low levels. At the same time, consumer markets continue to contend with persistent macro-economic pressures. Coffee futures reference prices have started to ease, following the downward trend seen over the past two weeks. Since the beginning of 2026, the New York Arabica market has declined by 16.47%, while London Robusta has fallen by 14.12%.

Excluding Brazil, which is a well-established coffee-consuming market and ranks second only to the USA in terms of consumption, a number of relatively newer markets have emerged over time, particularly among coffee producing nations. Countries including China, India, Indonesia and Vietnam have all seen greater domestic demand, alongside continued development of their value-added and export industries. For many of these traditionally tea oriented markets, however, coffee remains a relatively new category and volumes are still developing from a comparatively low base.

China continues to record year-on-year expansion in domestic coffee demand. According to the USDA, consumption is forecast to increase by 5.15% during the October 2026 to September 2027 coffee year, reaching 6.75 million bags. This demand will be met through a combination of domestically produced coffee and imported green beans, supporting the continued expansion of the local market.

In India, the USDA forecasts domestic coffee consumption to rise by 2.75% during the October 2026 to September 2027 coffee year, reaching 1.58 million bags. Growth is expected to be driven primarily by soluble coffee sales for at home consumption through e-commerce and traditional retail channels. This is being complemented by increasing demand from the out-of-home sector, including the HORECA channels.

Similar trends have been evident across a number of non-producing countries in Southeast Asia and the Middle East. The rapid expansion of contemporary coffee-shop culture in major urban centres is encouraging greater adoption among younger consumers and helping to broaden the region’s overall coffee market.

South Korea remains a particularly notable example, with consumption underpinned by a well established and deeply embedded café culture. Domestic demand has expanded steadily over the past decade, increasing from 2.46 million bags to 3.45 million bags. However, the sharp escalation in green coffee prices has resulted in a change in purchasing patterns. Elevated international coffee prices, together with the weakness of the Korean won against the US Dollar, which has declined by more than 6% since the beginning of 2026, have encouraged buyers to reduce volumes and draw down existing inventories. Higher input and import costs have subsequently filtered through to the retail market, with coffee prices increasing by an average of 7.80% year-on-year. This reflects the combination of higher futures prices, increased raw material costs and the additional expense associated with importing coffee, in an inflationary internal economic environment.

Overall, coffee demand across Asia remains on an upward trajectory. Regional consumption is estimated at approximately 38.50 million bags for the October 2026 to September 2027 coffee year, representing growth of 3.75% compared with the estimated 37.11 million bags consumed during the October 2025 to September 2026 coffee year.

The Certified washed arabica coffee stocks held against the New York exchange decreased by 4,874 bags yesterday, to register these stocks at 218,838 bags, with 73.51% of these certified stocks held in Europe, at a total of 160,860 and the remaining 26.49% being held in the USA at a total 57,978 bags. Of this, a total 6,748 or 3.08% of the coffees registered and stored in consumer country certified warehouses of the exchange, are Brazil washed arabica, and a further 25.42% of these certified coffees, from Honduras at 55,634 bags and 22.26% from Peru at a total 48,721 bags. The pending grading remained increased by 13,792 on the day, registering 16,997 bags pending grading.

The November 2026 to December 2026 contract arbitrage between the London and New York markets narrowed yesterday, to register this at 134.45 Usc/Lb. This equates to a 46.16% price discount for London robusta coffee. The arbitrage is indicative of a more balanced supply environment within the Robusta segment, while the continued price discount makes Robusta increasingly attractive, particularly to the soluble industry and price-sensitive consumer markets. The widening relative competitiveness of Robusta could support demand substitution where quality specifications allow, particularly among cost conscious roasters and soluble manufacturers.

It was a mixed day on the commodity markets yesterday, ahead of fresh macroeconomic data that is due to be released in the coming days for potential cues on interest rate direction including CPI data, while the US Dollar was softer on the day, traditionally a bullish factor for commodities traded in other currencies.  The London Robusta Coffee, Soybean, Sugar, Wheat, Silver and Platinum markets ended the day on a firmer note, while the New York Arabica Coffee, Cocoa, Corn, Gold and Palladium markets ended the day on a softer note. The day starts with the US Dollar trading at 1.355 Sterling, at 1.163 to the Euro and with the US Dollar buying 5.090 Brazil Real.

The London market started the day yesterday trading to the north of par on a firmer note, while the New York market started the day yesterday trading on a modest near to unchanged softer note. The London market continued to trade on a firmer note, while the New York market was pressured lower throughout the remainder of the early morning session. The London market hit a ceiling for the early morning session early in the day, to introduce sellers at the highs, the choppy trade in New York continued with the market finding support near the day’s lows to recover and trend positive. As the afternoon progressed, the London market continued a modest firmer path, gaining support to trend firmer for the remainder of the day’s session.  The New York market traded through par and into softer territory, to set a new low for the day. The New York market found support late in the day to recover from the day’s lows and settle on a modest softer note at the close, with less than half of the earlier losses of the day intact. While the London market settled on a firmer note, albeit back from the day’s high.

The London market ended the day on a positive note, with 53% of the earlier gains of the day intact, while the New York market ended the day on a negative note with 47.78% of earlier losses of the day intact. This mixed close for the markets, with the London market settling on a firmer note with some of the earlier gains of the day intact, and the New York market settling on a softer note at the close albeit back from the day’s lows, might see the markets set for a follow through steady open today, against the prices set yesterday, as follows: