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MILAN – The last week of August saw further gains in both coffee futures markets. On Friday 29 August, New York rose again, gaining an additional 860 points (2.3%) to end the day at 386.10 cents. To find a higher closing price for the main contract, we have to go back to 9 May. London followed at a distance, gaining marginally (+0.15%) and ending the week at $4,815. Compared to the previous Friday, ICE Arabica and ICE Robusta gained 2% and 3.5%, respectively.
Over the course of the past month, the two markets’ benchmarks appreciated by 39.1% and 47.7%, respectively.
The fundamentals remain delicate and complex. Adding further tension to the markets is the decline in certified stocks in New York, which fell to 710,196 bags on August 29, the lowest level in 15 months. The main origins are Mexico (178,940 bags) and Brazil (124,034 bags). ICE robusta coffee inventories also fell to a 1-month low of 6,552 lots on Thursday.
According to the latest update from Safras & Mercado, the Brazilian Robusta harvest was 100% complete and the Arabica harvest was 98% complete as of 20 August.
Meanwhile, the authoritative Brazilian consultancy has also cut its production estimates by 3.3%.
Production for 2025/26 is now seen at 63.35 million bags, 3% less than last year. The Arabica harvest is projected at 38.05 million bags, down 14% from 2024/25 (-6% from the previous estimate). The Robusta harvest is estimated at a record 25.3 million bags.
The Conilon/Robusta harvest, exceeding 25 million bags, helps to alleviate the situation somewhat, but does not fully offset the greater decline in Arabica, writes the Brazilian analyst in a note, adding that the Arabica harvest turned out to be lower than expected after a promising start.
“The second part of the harvest,” explains S&F consultant Gil Barabach, “showed a very different scenario,” attributable, according to most producers, to the decline in rainfall and the heat wave that occurred between the end of February and March, which added to the effects of last year’s long drought.
Exports in the 2025/26 marketing year are expected to decline by 11% to just over 41 million bags.
Even with lower external flows, stocks at the end of the 2025/26 period will remain very low, mirroring the situation at the end of the 2024/25 period, writes S&P. This will continue to cause supply fragility and support prices.
This shows even more that there is a need for the 2026/27 crop to be a bumper one, concludes S&M
The flowering of the new crop (2026/27) will begin in a few weeks, and its outcome will be one of main factors driving the markets in early autumn.
A panel of experts surveyed by Reuters expects a substantial balance between world supply and demand in the current coffee year ending this month. A slight surplus of 1.45 million bags is expected for 2025/26. Brazil’s 2025/26 production is estimated at around 65 million bags.
Given the positive cycle of Arabicas, the 2026/27 crop could reach as much as 70 million bags. As for Vietnam, the next harvest (2025/26), which begins in autumn, is expected to reach 31 million bags, an increase of 10.71% on last year.
Based on these forecasts, the panel expects prices in New York and London to decline slightly, falling to 330 cents and $3,500 respectively by the end of the year.
