MILAN — Coffee futures markets rebounded strongly in the week that saw the European hemicycle approve a one-year postponement in the application of the controversial Eudr regulation, along with an amendment changing the classification of countries. In New York, the March contract closed Friday, 15 November, at 283.30 cents, 390 points higher than the previous day and 30.2 cents (+11.9%) higher than the previous Friday.
This is the highest price for the main contract since September 2011. London rose 9.1% from the previous week, but closed Friday slightly lower at $4,773 (-$4).
Driving this sharp rebound in coffee futures prices were uncertain production prospects in the world’s two largest producing countries.
This sharp rebound in coffee futures prices was driven by uncertain production prospects in the world’s two largest producing countries.
In Vietnam, the recent bad weather – caused by the extreme weather phenomena occurred over the last weeks – although not as severe as in other parts of the country, has hampered harvesting operations in the coffee areas, creating problems and delays.
In Brazil, the harvest potential already appears to be reduced. due to last winter’s record drought, which was only partially alleviated by the early spring rains, that allowed a decent flowering.
However, soil moisture levels remain low and the lack of rainfall is likely to have a negative impact on the further stages of the growing cycle.
Also impacting Arabica prices on Friday was the release of a preliminary estimate for the 2025/26 Brazilian crop by by respected US financial services firm StoneX.
The New York-based group acquired Mercon Specialty in June this year from the Dutch giant Mercon Coffee Group – currently in bankruptcy proceedings – and at the same time set up StoneX Specialty Coffee, a new division specialising in the speciality coffee business.
StoneX’s specialists travelled through Brazil’s coffee belt for over two months, covering some 20,000 kilometres.
The verdict after this long journey? The 2025/26 harvest will be 65.60 million bags, in line with this year’s (-0.45%). What will change, however, will be the weight of the two varieties.
Arabica production will in fact decline by about 10.5% to 40 million bags, while that of Robusta will grow by almost 21% to 25.6 million.
This opposite trend is justified by the distinct effects of climate in the main production areas.
The long dry spell – unprecedented for the last forty years – combined with the high temperatures recorded in June and July, interspersed with a few cold spells, negatively affected the crops in Sul de Minas, São Paulo, Cerrado Mineiro, Matas de Minas and southern Espírito Santo. In southern Minas Gerais, the largest Arabica area, production is expected to decrease by 5.1 %, to 15.8 million.
In Matas de Minas, production will fall by more than a quarter (-25.8%) to 6.8 million. In contrast, production in the Cerrado Mineiro will recover to 6 million bags.
On the other hand, the outlook on the robusta front is very positive. ‘Conditions for the development of the robusta crop have been favourable so far. The crops are in a good vegetative state, with good flowering and fruit development taking place under appropriate conditions,’ the report states.
Production in Espírito Santo, Brazil’s top Robusta producing state, is expected to increase by 27.8 percent, favoured by efficient use of irrigation and improved phytosanitary conditions.
On the other hand, the outlook on the Robusta front is very positive. Conditions for the development of the Robusta crop have been favourable so far. The trees are in a good vegetative state, with good flowering and fruit development taking place under suitable conditions, says the report.
In Espírito Santo, Brazil’s top Robusta state, production is expected to increase by 27.8%, helped by the efficient use of irrigation and improved phytosanitary conditions.
The situation looks less positive in Rondônia, a state that has seen record yields this year, where the harvest will be negatively affected by drought and high temperatures.
It should be stressed that this is a preliminary estimate. The first detailed forecasts for next year’s harvest will not arrive until January.
