The Market Update explores how this week’s news, weather and other factors are shaping the global coffee trade.
We saw another strong week in coffee, with prices lifted 700 points, basis N26. As First Notice hit, we saw a good amount of coffee being pulled, i.e. stopped from the exchange. The inversion has deepened further as K/N widens to 1500. Week on week, K traded 292/310 and N 288/295. The main driver remains the same; the lack of available washed or milds.
Very few offers remain from the Centrals. Peru is still some weeks away from entering its main harvest. Colombian prices remain firm to higher, and shipments are very thin (if offered) until we get to Aug/Sept.
Nearby, Brazil prices remain in the stratosphere. We will only see a break in new crop offers once the Brazilian winter is cleared. Currently, that frost season is fast approaching, and we pray for warm and cloudy days to carry through this period.
Cold fronts, clear skies and full moons will be closely monitored, as any cold snaps will push NY back up — where to will depend on the scale of any frosts.
Given limited offers from the core Centrals, we can only (again) suggest booking coffee forward. Stocks are limited and we see ever shrinking stocks in the U.S.. Better types will vanish first, along with certified coffees. We are already seeing offers on Organic and Fairtrade Organic slow down.
Delays in shipments as well as slower sailing times appear likely to continue for the coming weeks. As a result, we are starting to see a clogged pipeline and delayed arrivals.
Freight rate increases are being implemented by shipping lines in response to higher oil costs. Additionally, freight lines are adding surcharges and civil unrest protection insurance charges on sailings from Djibouti.
Forward planning remains key to secure continued supply. We advise planning through 2026 and into early 2027. —N.B.
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