Coffee Market: What Happened Last Week – and Where Are We Heading?
by Philip von der Goltz
What a week – simply mad. In more than 25 years in the coffee world, I have never seen anything like it. If one were to measure the health of a market the way one measures the health of a heart – by ECG – the suspicion would be hard to avoid: patient KCU26 is suffering a heart attack. For last week's price swings in the coffee market, there is only one word: brutal.
A picture is worth a thousand words:
One glance at these spikes, and any cardiologist would have the patient rushed in under blue lights.
But first things first: What triggered these enormous swings? What is behind a move of historic dimension? What did our analyses of recent weeks overlook or misjudge? Questions upon questions – and only one answer: shhhhh... silence...
A quick look at what we already know:
The persistent rain in Brazil continues to delay the harvest. For comparison: at this point last year, harvest progress already stood at 60 percent; today we are at an estimated 52 percent. Add to this that Brazilian farmers currently show little appetite for selling. The uncertainties of the "Super El Niño", coupled with the farmers' exceptional financial strength, allow them to wait and play for time. So far, their bet is paying off. And yes, there is still the theoretical frost risk: we are in the middle of the Brazilian winter, yet independent meteorologists are currently sounding the all-clear on the weather front.
Certified arabica exchange stocks stand at 366,756 bags – the lowest level in two and a quarter years. That, too, is not exactly news, but it is certainly a reason to pay attention.
We stand by our core message: there is enough coffee in the world – it just isn't (yet) where it is being drunk.
So what, then, caused these massive price swings?
For this, I would like to refer you to our latest blog, which introduces further key players of the commodity exchanges. Because the muscles of the funds and speculators are often considerably bigger than those of the traditional coffee trade – and so it was with this move. The reallocation of cash and the positioning of the funds – whether CTAs, macro or commodity-focused hedge funds, index funds or passive commodity investors – produce these extreme, indeed parabolic, accelerations. They create a kind of one-way-street volatility: up 50 c/lb today, down 32 c/lb tomorrow. And this is happening not only in coffee, but even more dramatically on the cocoa exchanges – and likewise in sugar and orange juice concentrate.
As we know, price shocks of this kind are rarely followed by a swift return to equilibrium – another uncomfortable lesson from the Brazilian coffee frost of 1994: the shock was followed by months of erratic trading, and years later by the very overproduction that led into the price crisis of 2000–2004. Extreme prices do solve the problem they signal – but with brutal delay. A hog cycle whose whiplash effect arrives so out of sync that it is often no longer even connected to its original cause.
World events, meanwhile, are fading into the background. Geopolitics and wars, the Strait of Hormuz, global supply chains, rising commodity prices – all of it is losing weight for now. The focus is on the coffee price, at least in our little coffee bubble: arabica prices in New York headed into a well-earned weekend with a new contract high of 357 c/lb, a weekly gain of 10 percent and a closing price of 334.25 c/lb.
Robusta prices, too, saw an extremely volatile week. They closed slightly up (+3.7 percent), settling at 3,852 USD/MT on Friday.
And now what? It would not surprise me if the coming days remained volatile and directionless. Managed money can flip its positions within seconds – and it does. In an age in which algorithms shape the decisions, the fundamentals of the coffee world count for less than the output of complex calculations run by programmed black-box models. It is easier to predict the next football World Cup Quarter Finalist than the actual direction of the futures. One wonders whether Paul the Octopus would have known better.

(RIP Paul the Octopus, 2010)
Origin News: What is happening in Central America and Mexico?
Weather conditions across Central America remain rainy and cloudy. The continued rainfall has allowed farmers to begin fertilizing their coffee fields, providing the moisture needed to support crop development and ongoing fertilizer applications. However, concerns about the potential impact of a strong El Niño event persist across the region.
In Nicaragua, coffees are virtually sold out. Availability in Honduras is also limited, with only a few lots still on offer. The focus has now shifted to shipping the remaining 2025/26 crop and preparing for the upcoming harvest. Current expectations point to healthy crops in both countries, with production volumes similar to those of the current season.
Meanwhile, coffee production in Mexico is expected to increase by around 1%. According to the USDA Foreign Agricultural Service, the growth is being driven by sustained investment following two years of favorable coffee prices, as well as the continued expansion of Robusta production. Overall, Robusta accounts for approximately 15% of Mexico's total coffee output.
There are no new developments on the logistics front.
Market Prices
Coffee Production Estimates for Central America
















































































































