General News
Although last week was a short week in trading terms due to Thanksgiving in the USA, we saw new record prices in New York on Wednesday and Friday. For the first time since 1977, prices above 335 c/lb were seen again. On Wednesday alone, a price increase of over 14 c/lb (+4.6%). Friday also got off to an amazingly furious start. But where does this bullish momentum come from? There is no real fundamental news in the market. Yes, the "bean counters" are still out and about in Brazil, and new reports on the latest harvest expectations for 25/26 will undoubtedly be blasting out soon. And yes, it would really surprise everyone if the 25/26 harvest turned out to be a bumper crop; previous forecasts have already been rather cautious. And yes again, the harvest in Vietnam and Central America is delayed by a month. The geopolitical struggles in Ukraine, Gaza, Lebanon, Israel, the Red Sea, and the associated global logistical delays are also news that the futures market priced in months ago. The uncertainties surrounding the entry into force of the EUDR on 30.12.2024 are also nothing new. So why is the market shooting up to such heights? Do a few hedge fund managers and algo traders want to cash-in on their annual bonus, or are there simply far too few sellers in such a market situation, and prices are rising almost "on their own"? The truth probably lies somewhere in between, and we'll all have to learn to deal with the extreme volatility in the coming weeks. The Chinese proverb: "may you live in interesting times" can probably be described more as a curse.
Arabica prices in New York fell during the course of the Friday, closing at 318.05 c/lb. Nevertheless, the coffee price has risen by 5.3% this week. The trading range for the week is an astonishing 44.40 c/lb - that really is a lot!
The Robusta world in London is also extremely bullish, and, with a weekly trading range of over 1,000 USD/MT, it has shown how much power there is in such movements. The week brought a new all-time high of 5.730 USD/MT and closed with slight losses at 5.409 USD/MT. But can we really talk about losses when prices have risen by 8.5% in one week alone? Hardly.
The following table contains all coffee-related data. It is updated weekly.
Brazil
Climatic conditions in Brazil's coffee-producing regions remain favorable, with rainfall supporting good flowering and raising producers' optimism for the 2025/26 harvest. Nevertheless, some concern remains regarding the extent of damage caused by the prior dry and warm months.
Currently, in Minas Gerais, forecasts predict moderate rainfall paired with temperatures up to 30°C throughout the week. Meanwhile, in Rio de Janeiro, temperatures are expected to rise as high as 35°C.
Brazil is currently between seasons. Activities are expected to take off around March with the Conilon (Robusta) harvest.
According to the USDA Foreign Agriculture Service, Brazil will continue to be the world leader in coffee production, with a forecast of 66.4 million bags for the 2024/25 market year—an increase of 0.2% compared to the previous season.
Coffee flow has slowed down as producers assess the market movement and show little urgency to sell. Due to volatility and high levels of the New York Arabica market, both the FOB and domestic markets remain sluggish. Meanwhile, exporters are paying elevated prices to secure volumes for short contracts.
Despite the record export numbers, logistics remain challenging at the Port of Santos with ongoing issues, including container shortages and shipping delays.
Colombia
The regions of Huila, Valle del Cauca, Antioquia, and Caldas have experienced moderate rainfall, with rainy conditions expected to persist throughout the week. These rains are beneficial for the development of the upcoming Mitaca crop.
Harvest activities in the southern regions are currently in full swing, with the main crop progressing steadily. Volume and availability are expected to improve in the coming weeks.
According to the USDA Foreign Agricultural Service, coffee production for the 2024/25 market year is now projected at 12.9 million bags, reflecting a 1.1% increase compared to the previous year.
Exporters report strong demand for prompt shipments, with FOB differentials remaining firm.
On the logistics front, there are no significant updates from the ports of Buenaventura and Cartagena.
Peru
World Coffee Research is collaborating with eight Peruvian organizations to establish 10 new seed lots of high-performing coffee varieties across Amazonas, Cajamarca, and San Martín. These varieties are high-yielding, coffee leaf rust-tolerant, and offer good cup quality. The goal is to increase the availability and accessibility of quality planting material for the country's farmers. The project would also allow an influx of thousands of high-performing seeds generated annually, providing enough material to renovate up to 1,000 hectares of land each year.
Rainfall continues to drop in the northern regions of Cajamarca, Amazonas, and San Martin. In the southern areas of Puno and Ayacucho, moderate rain is also expected throughout the week.
Due to the harvest ending almost 2 months earlier than usual, Peru is sold out. Coffee flow is gradually slowing down, and the local market prices continue to increase as exporters try to secure the little parchment that is left. Unfortunately, we hear of more and more defaults.
Roadblocks have been reported in various regions of the country by informal mining groups, demanding the extension of the Mining Formalization Registration (Reinfo). The protests have disrupted traffic in Arequipa, Ica, La Libertad, and Cusco, with at least ten roads being blocked, severely impacting transportation. This is also causing delays in moving coffee to mills and to the port of Callao.
Production Estimates for South America