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MILAN – Arabica coffee futures rebounded on Friday, 26 December. In New York, the contract for March delivery gained 1.5% in the last session of the week, closing at 350.25 cents. London was closed on Friday for Boxing Day holiday. On Wednesday 24 December, the contract for March delivery rose by $34 to settle at $3,858.
Coffee futures prices were pushed up by news from Indonesia, where widespread flooding has affected about a third of the farms in northern Sumatra. Arabica crops were particularly hard hit, while damage to Robusta crops was more limited.
According to the president of the Indonesian Coffee Exporters Association, the damage threatens to reduce the country’s coffee exports by as much as 15% in the 2025-26 season.
There was also concern about the heat wave that hit Brazil’s coffee-growing areas over the weekend.
India was the world’s seventh largest coffee exporter in the 2024/25 fiscal year (April-March), with sales reaching $1.8 billion. In the 2025/26 fiscal year, exports have so far amounted to $1.341 billion, up 13.74% compared to the same period last year.
The reduction of GST (Goods and Services Tax) from 18% to 5% on coffee extracts, essences, and instant coffee is a major fiscal step for the sector.
According to the Government of India, this change is expected to lower retail prices by 11–12%, encourage domestic consumption, and enhance profitability for small processors. The initiative will also strengthen the domestic market base and enhance India’s per capita coffee consumption.
The recently concluded India–UK Comprehensive Economic and Trade Agreement (CETA) marks a key milestone in bilateral trade relations. The pact offers tariff advantages for Indian value-added coffees, particularly instant coffee.
The United Kingdom, which already accounts for 1.7 percent of India’s coffee exports, will now provide duty-free access for Roast & Ground and instant coffee, enabling Indian exporters to compete more effectively with suppliers from Germany, Spain, and the Netherlands. The agreement establishes a robust foundation for increasing exports of value-added coffee products to the UK.
The latest Commitment of Traders report from the New York Arabica and London Robusta Coffee markets will be released later today.
