
Coffee News
The recent surge in international coffee prices defies easy explanation through classic market fundamentals. Analysts may still try to anchor their outlooks in supply-demand data and macro events — yet the latest rally on the New York and London exchanges appears to go well beyond that.
A large part of the upswing seems driven by AI-fueled trading strategies and geopolitical dynamics rather than bean shortages alone. Those pointing to the steadily shrinking pool of certified exchange stocks can justify a bullish tone — but that only tells half the story.
The real driver sits in Washington. Donald Trump's 50% tariff on Brazilian coffee imports — the so-called "Tarifaço" — has unleashed a double shockwave. U.S. roasters are expected to lose some 8–9 million bags of Arabica from Brazil, roughly a third of their total demand. That shortfall is exerting enormous pressure across the global supply chain. The question of who can possibly fill the gap remains unanswered — and keeps traders on edge.
As if that weren't enough, confusion surrounding the EU's forthcoming Deforestation Regulation (EUDR) adds another layer of bureaucratic fog. When nature alone doesn't make life complicated, Europe's policymakers can always be trusted to add a little extra red tape — and cost.
On the production side, however, there is little reason for alarm. Weather conditions in Brazil and Central America have remained favourable; soil moisture levels are close to historical averages. In Central America, the new crop may even begin as early as October — weeks ahead of last year. Vietnam, meanwhile, is heading for what could be another above-average harvest.
Demand, by contrast, is showing signs of fatigue. Rising prices for both green and roasted coffee have begun to dampen global consumption. High prices also continue to squeeze liquidity along the entire value chain — from cooperatives and exporters to importers and roasters — noticeably slowing trade activity.
At the terminal markets, the momentum remains firmly upward. The December Arabica contract climbed to 392.35 c/lb, a new two-week high, closing the week up 3.4% at 390.75 c/lb.
In London, Robusta outperformed once again, rising almost 8% to 4,588 USD/MT before settling at 4,527 USD/MT.
One constant remains: volatility. It has become the new normal — and there is little sign that this unsettling background noise will fade anytime soon.
As usual, the key coffee market data can be found in the table below.
Origin News: East Africa
Ethiopia
Ethiopia remains politically tense, with sporadic clashes continuing in parts of Amhara and Oromia even as the government pushes forward economic reforms and debt restructuring talks with the IMF.
Despite this fragile backdrop, coffee exports have reached record levels in 2024/25, leaving domestic stocks low.
Rainfall has persisted longer than usual into September—beneficial for yields but risky for bean development if it continues.
Harvesting has begun in the lowlands of Limu and Jimma, while logistics have slightly improved.
With tight stocks and high global prices, Ethiopia's exporters remain watchful as both weather and politics could quickly alter the outlook.
Kenya
After a turbulent year marked by youth-led protests and fiscal tightening, Kenya's economy remains resilient, expanding around 5%. The Shilling (local currency) has stabilized, and inflation is within the Central Bank's target range.
In the coffee sector, activity has slowed as the fly crop winds down. Differentials firmed last week, largely reflecting corrections in New York prices rather than local fundamentals.
Auction volumes remain steady, supported by near-term shipping demand, though liquidity is thin and little new coffee is expected in the coming weeks.
No significant news to report from Mombasa.
Tanzania
Tanzania is entering a politically charged month ahead of the 29 October presidential election, though no major disruptions are expected. The IMF forecasts growth near 6% in 2025, while inflation remains contained.
The Tanzania Coffee Board, working with EU partners, is accelerating EUDR compliance via a national farmer registry and digital traceability pilots—a key step to safeguarding EU market access.
In the field, the Arabica harvest is nearing completion in the south, with strong drying conditions and brisk sales. In the north, cooler weather has slowed ripening, leaving roughly half the crop still on the trees.
Robusta flows remain sluggish as farmers hold out for better prices.
Domestic competition among traders remains intense amid firm differentials and limited availability.
At the port of Dar es Salaam congestion has ticked up slightly to about four days, with container shortages as other export crops—beans, cashew, cotton—compete for space.
Rwanda
President Kagame's government remains firmly in control after his landslide 2024 re-election, while relations with the DRC stay tense despite mediation efforts. The economy continues to expand around 7%, supported by strong service exports and public investment.
Coffee is currently in the off-season; dry mills are busy fulfilling shipments as the export peak concludes.
Sporadic rains in September have encouraged good flowering, and farmers are optimistic for the next crop.
Port congestion in both Mombasa and Dar es Salaam has delayed several outbound consignments, though internal logistics remain efficient.
Uganda
With the next general election scheduled for January 2026, Uganda's political climate is stable but watchful as the government continues operations against rebel groups in eastern DRC. The economy is projected to grow by roughly 7% this fiscal year.
On the ground, Arabica harvesting is gaining pace, with improving quality and adequate flows, though volatility in New York continues to unsettle prices.
Robusta exports have slowed as the season nears its end, with only small volumes reaching Kampala.
Malawi
Malawi has entered an election season of its own, with President Lazarus Chakwera facing former leader Peter Mutharika amid mounting inflation and food insecurity. The economic pressures have weighed heavily on rural communities, though the small domestic coffee sector continues to find niche buyers for its washed Arabicas. Stable weather has supported early flowering, but rising costs and currency weakness remain key constraints for producers.
East Africa - Production Estimates