Coffee Market: What Happened Last Week – and Where Are We Heading?
This week, NATO members are gathering in Ankara. The agenda: alliance cohesion – and an attempt to diplomatically contain the escalating tensions between Russia and Ukraine. Meanwhile, the conflict at the Strait of Hormuz simmers on, unresolved. And yet: the economic and geopolitical fallout has so far been smaller than feared. What began as a looming threat to commodity markets is increasingly revealing a more harmless side.
At the coffee exchanges in New York and London, the days had recently been drifting along without direction – until Tuesday put an end to the summer siesta. Prices shot through the roof, with New York posting a trading range of a hefty 25 c/lb in a single session. What's remarkable is not so much the move itself as our reaction to it: we have apparently grown so accustomed to this volatility that we greet even an aggressive swing like this with little more than a bemused raised eyebrow.
Some context: since the contract high of 361 c/lb last September, arabica futures had fallen by roughly a third, touching a low of just under 239 c/lb exactly one month ago. Since then, prices have staged a remarkably robust recovery – and this despite a record crop beckoning in Brazil. Heavy rains, however, are delaying that harvest. By just a few weeks – but that is precisely what has the market on edge. Stocks in consuming countries are extremely low, and they will stay that way for now. There is plenty of coffee in the world – just not, unfortunately, where it gets drunk. The new crops from Central America, Colombia, and Peru are as good as sold out, and washed arabicas are scarce. Differentials keep climbing – and now the futures market is responding, too.
Brazilian producers, meanwhile, are holding back on sales. After such financially rewarding years, that is hardly unusual behavior. But history teaches us that this strategy rarely pays off in the long run. High-price phases act like a global invitation: farmers around the world plant more coffee – there is currently scarcely a more lucrative agricultural crop anywhere. Word like that travels fast. It takes years, admittedly, for the fresh seedlings to become productive – but then the pattern we know from countless commodity cobweb cycles plays out: high prices unwittingly become the best cure for high prices. Against that, no amount of withholding sales in Brazil or elsewhere will help in the long run.
It is winter in the Southern Hemisphere, which means frost reports are once again part of the standard repertoire. The latest weather forecasts, however, point to milder temperatures in Brazil's core growing regions.
And while here at home, after weeks of unbearable heat and with wildfires burning in France, we find ourselves grateful for a few rainy, overcast days, the next stress test is building in the Pacific: El Niño has set in and is expected to strengthen through year-end – with foreseeable consequences for Central America and Peru. One need not be a prophet to read this as a warning shot. The only question is: what more has to happen before we change our behavior and realign our priorities? Maybe a call from US President Trump to FIFA's Infantino might make climate change disappear or – at least - move it into a next season...

News from Origin: Brazil, Colombia, and Peru
Brazil
After Norway eliminated Brazil from the World Cup last night, the Brazilian team will return home to a country in the midst of its coffee harvest. The harvest remains behind schedule, with most producing regions having completed around half of the crop.
Recent rainfall is raising concerns, causing coffee cherries to fall from the trees and challenging the drying process of the crop. As a result, coffee quality could be affected. Overall, weather conditions remain a key concern for market participants, as excessive rainfall during this period could also impact the crop that will be harvested in mid-2027.
With the high volatility in the market, trading activity in the Arabica market remains slow, with tightening differentials.
The Conilon (Robusta) market has been more dynamic in the last few weeks, with significant volumes being traded. Even so, total trading volumes remain below average for this period.
Operations at the Port of Santos are running normally.
Colombia
Following the runoff election in June, right-wing presidential candidate Abelardo de la Espriella secured victory with 49.66% of the vote. He is scheduled to be sworn in as President of Colombia on August 7.
Weather conditions continue to be closely monitored, with forecasts calling for above-normal rainfall in several coffee-growing regions. While conditions vary across the country, excessive rainfall could disrupt harvesting and drying activities, overall affecting quality.
The rainy conditions persist across central regions such as Antioquia, Caldas, Risaralda, and Valle del Cauca, where the Mitaca (fly crop) is currently underway. Around half of the harvest is already complete.
Coffee flow in the domestic market improved significantly as producers released larger volumes from previously held inventories, boosting sales across coffee regions. Competition for available supplies, however, remained intense, with both exporters and local buyers actively seeking to secure volumes, keeping differentials at elevated levels.
There are no news in the logistics front.
Peru
After weeks of reviewing the ballots, Peru's electoral commission declared Keiko Fujimori the winner of the presidential election. This marks Fujimori's fourth bid for the presidency and returns her family name to power more than two decades after her father, former President Alberto Fujimori, was ousted.
Turning to weather, ongoing rainfall is becoming an increasing concern due to its negative impact on harvesting, drying conditions, coffee quality, and yields. Moreover, the government has declared a state of emergency in 22 regions because of the threat of El Niño-related rainfall. Precipitation is expected to range from moderate to very heavy, including in key coffee-producing regions such as Amazonas, Ayacucho, Cajamarca, Huánuco, Pasco, Piura, and San Martín.
Meanwhile, harvest activities are gradually gaining momentum. In the north, our suppliers in Jaén and Rodríguez de Mendoza report that harvesting is progressing slowly, with lower volumes than last season due to persistent rainfall during the flowering and cherry development stages. The continued rains have also limited access to several coffee-growing communities, delaying harvesting, processing, and transportation.
Despite these challenges, quality remains positive. The first shipments of the new crop are now on their way to us and should arrive through the end of this month and August.
Coffee availability continues to be limited, and competition for available supplies is strong, keeping local prices on an upward trend. The challenge for cooperatives now is completing the volumes to fulfill existing contracts.
There are currently no new updates regarding operations at the Port of Callao.
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