August Market Report

Good day. Welcome to DRWakefield’s Weekly Coffee Market Report!

This report touches upon the Arabica and Robusta coffee futures market, currency pairings and news from origin. See our Market Report Terms page for clarity on any terminology in the coffee market report below.

Live Market Data

Coffee Market Report 01/09/2025

This report covers the period from Monday 25th August to Friday 29th August and was written by Guus Bremer.

Coffee Market

The impressive rally we saw this month, from 277 on August 1st to 380 on Friday, 22nd (∆ of 103 usc/lb or $2.28/kg UP), was briefly halted on Tuesday last week and corrected to 363.9. It then picked up pace again to close on Friday at 386.10 USc/lb. 

Global Green Coffee Route RE-Shuffle : 

The biggest driver of coffee prices going North ↑ has been Trump’s tariff hike that came into play on 6th August, including the 50% duties on Brazilian coffee imports. This was oil on the fire for speculation since Brazil sends about 8 million bags annually into the US market (or about 1/3 of their total imports). 

Its real impact is still unclear, as importers and roasters have some coffee stocks for 30 to 60 days, but the market has already reacted strongly. Brazil’s Export Guarantee Fund will offer loans, tax breaks, and insurance to the country’s growers and exporters to ease financing and risk pressures, but it could be like ‘scratching a whale’ and have little effect as a real cushion to prevent bigger trade shocks. 

On a positive note, although I love Brazil, and have high admiration for their agro-efficiencies and all its kind people; I do think that it could be seen as a good thing doors are being opened for some reduction in the dependency on Brazilian coffee overall and their ridiculous high global market share over all the numerous small holders in other coffee origins.  

Some possible scenarios now unfolding are as follows: 

• More affordable low grade Honduras with higher defect counts are being looked at as a replacement for the Brazilian black gold that so many US buyers got so used to in their roasting profiles and blends 

• African and Central American coffees to become more attractive for US roasters, but also for EU roasters due to traceability investments and stable supply growth. 

• Colombia and Peru commercial grades will become candidates to compensate volumes, although that will require significant (and expensive) cup and roasting profile changes.

• Supply chains could get even messier because goods will start moving faster in different directions than shipping companies can keep up with. They need time to figure out where to put all their containers. Those hard-to-find 20-foot containers that coffee gets shipped in will keep ending up in the wrong places. 

Global Green Roaster Giants RE-Shuffle : 

On the 25th of August, Keurig Dr Pepper acquired JDE Peet’s. With combined coffee revenues of roughly $16 billion, they have plans to separate into two independent US listed companies; one focusing solely on beverages in the US, and the other one serving as a global coffee company.  

The new entity will stand as a clear number two behind Nestlé, closing the gap in scale, portfolio, and geographic reach. 

Keurig’s dominance in North America complements JDE’s huge retail, out-of-home, and capsule businesses in Europe, Latin America, and Asia-Pacific. Synergies are expected to deliver $400 million in cost benefits within three years. 

Such high hopes were once the same for the other giant Coca Cola when they bought Costa Coffee in 2018 for £3.9bn. Last week, on 23rd August, it was revealed that they are now trying to induce interest to sell it off for around £2bn. The timing of the initial purchase right at the start of Covid was not great. Expenses (particularly in raw coffee prices) then further wiped out margins, on top of increasing competition from independent coffee shops. Costa’s express network of over 12000 vending machines, however, remains strong and profitable.  

EUDR

We are now entering a phase where shipments from origin could get into serious trouble if exporters can’t prove 100% that the land it was sourced from wasn’t deforested. If Sep shipments roll into Oct/Nov shipments and show up after 31st Dec at the European customs without the right paperwork, they will get rejected. This will turn into way stricter and cumbersome checks before anything gets the green light to ship out. 

Origin Focus

Frost in parts of Minas Gerais and Cerrado in Brazil created uncertainty about potential 2026 crop losses. About 10% harm is expected, however it’s too early to firm up these stats. Lower-than-expected yields in the current crop and last week’s lack of rain in Minas Gerais have further reinforced buying interest. Despite the rise in NYC, farmers are holding to their high differentials for new crop.  

Colombia’s mitaca (fly) crop has been good; however, there is very little coffee flow, and there’s a gap until October for new volumes to become available. Colombia is ‘only’ facing a relatively small 10% (US) import tariff. Colombians are reluctant sellers. The tight un-certain situation and little cherry availability are keeping differentials high and firm. 

Higher diffs for Colombian washed are pressuring Peruvian offers. Difficulties remain with shipping our organic coffees (that we source mostly from the north) due to little container equipment in Paita. 

Organic rules are becoming stricter in Indonesia, and audits are taking forever, delaying the re-certification of cooperatives. EUDR rules are further challenging the small farmer groups trying hard to comply with new regulations, yet weather has been good and export volumes of especially the robusta coffee from Sumatra have surged sharply, up almost 400% year over year in early 2025. Arabica’s small (but valuable) contribution is expected to end up 1.45 million bags out of total 11.3 mln production. 

Currency and macro outlook

The tariff related inflationary effects are so far moderate. Besides, the EU-US reached a political ‘deal’ on 27th July, placing a 15% tariff ceiling. This is, of course, merely a ‘well-meant gesture’, and certain people need to be watched carefully if they will stick to their word.  

It does seem to make it easier, though, for the US Federal Reserve (Fed) and the European Central Bank (ECB) to resume their rate-cutting policy in 2025. 

What’s the impact on our €uro and GBP? Well, so far it’s playing out well, both increased last week; currently showing a healthy 1.17 and 1.35, respectively.    

Coffee Market Report 26/08/2025

This report covers the period from Monday 18th August to Friday 22nd August and was written by James Duncan.

Coffee Market

In the words of Yannis Philippakis: “the black bull is back in town”. If by “town” you mean the C market. Posting gains every day last week, the December terminal KCZ25 opened at 334.80 c/lb on Monday 18th August and closed out at 378.30 c/lb – a whopping 13% increase (+43.5 c/lb). Key events during the week include first notice day for the September terminal KCU25, reports by Somar Meteorologia that Minas Gerais received no rain that week, and Cecafe reported that coffee exports in July fell 28% year-on-year.

Further drivers for the bullish sentiment include:

• The USA’s 50% tariff on Brazilian goods. Brazil is confident they will be able to exclude Coffee from tariffs; but until that is confirmed the uncertainty will remain an upwards pressure on the market. This has also led to US buyers to seek alternatives from Central and South America in the short term.
• Decline in ICE Arabica Certified Stock. The ICE monitored inventories briefly fell to a 1.25-year low on August 14th before recovering.
• Frosts in Brazil. Although these were reported to be localized and of negligeable impact on the 25/26 crop, fears remain of their effect on the 26/27 harvest as well as further potential frosts.

Origin

The harvest in Peru is progressing well and the crop is reported to be almost completely sold, with exporters only offering small amounts of FTO certified coffee. Most of the projected harvest is being saved to fulfil outstanding commitments, with exporters unwilling to sell the remainder as uncertified. Meanwhile in Colombia, we have received mixed reports of the harvest(s) – with some claiming that heavy rains in Central/South have led to a decline in volume in 2025 Q2, while others detailing a fruitful harvest held back by intermediaries in anticipation of the market going up.

COT & certified stocks

↑ Non-commercials increased their short position by 1,114 for a total of 13,237 lots short and increased their long position by 338 for a total of 29,438 lots long. Net long position of 16,201.

↑ Commercials increased their short position by 10,437 for a total of 99,862 lots short and increased their long position by 6,458 for a total of 44,286 lots long. Net short position of 55,576.

Currency and Macro Outlook

The US dollar firmed its ground over the week with the dollar index, which measures the strength of the dollar against a basket of foreign currencies, reaching 98.72 – a gain of approximately 0.9% by Friday. This rally was mostly attributed to FX traders reigning in their expectations of a Federal Reserve rate cut in September. The Euro and Pound Sterling weakened slightly as a result, hitting their lowest levels since early August.

UK consumer inflation rose unexpectantly to 3.8% mainly caused by higher airfares, petrol and grocery costs. Many now believe that the Bank of England are unlikely to cut interest rates until Spring 2026. Germany’s economy meanwhile posted a 0.3% contraction in Q2, attributed to weaker US demand and a strong currency.

Coffee Market Report 18/08/2025

This report covers the period from Monday 11th August to Friday 15th August and was written by Jack Ravenscroft.

Coffee Market

Coffee futures surged in both New York and London last week, with the September Arabica contract opening at 307 cents and closing at 341.65 cents, the highest weekly close since mid-June. The rally was driven by continued declines in certified stocks, a continued strength in the Brazilian real, and a sharp 20.4% drop in Brazil’s green coffee exports in July. Adding to the volatility were ongoing trade tensions surrounding the 50% U.S. import tariffs on Brazilian coffee. This climate of uncertainty has dampened physical trading and fuelled increased speculative activity.

The Brazilian harvest is nearly complete, with 94% finished as of August 6 according to Cepea. However, following the cold front at the start of last week, concerns over frost damage triggered short covering, further fuelling the bullish sentiment. The Cerrado region appears to be the most affected, with an estimated 20% of its coffee-producing areas impacted by white frost. While the effects of frost should never be underestimated, especially given the potential devastation for individual producers, early indications suggest that the overall crop damage is negligible on a global scale.

As fresh coffee flows for certification stall and speculative pressure mounts, spreads have widened. This is particularly true in New York where the September/December spread closed at a 7.45 cent premium. With the first notice day for September contracts approaching on August 21, market players remain on edge.

Origin

Heavy rains in India continue to punish the producing regions. A series of low pressure systems along the east coast brought prolonged rain and storms to peninsular India. The outlook for the next harvest will become clearer in the coming months, but these recent weather events are just another example of a long-term trend. Expect lower output and reduced export volumes. At the same time, escalating prices, especially for robusta, are buoying farmgate returns. Stocks remain low, further tightening supply. Demand, both domestic and international, remains strong, particularly for soluble and value-added products.

COT & certified stocks

↑ The Non-commercials hold an overall net long position of 16,977.

↑ The Commercials increased their net short to -51,597 futures lots.

↓ Overall, Open Interest decreased to 146,352 futures lots.

↓ Certified Arabica stocks fell once more to 731,739 bags.

Currency & Macro Outlook

The USD index weakened steadily over the week, falling from 98.25 to 97.85 by Friday. This decline mirrored growing market conviction that the Fed would reduce interest rates as domestic data softened, compounded by rising political and trade-related uncertainties.

The Brazilian Real (BRL) traded flat against the USD last week. The currency faced headwinds from escalating trade tensions, particularly the newly imposed 50% U.S. tariffs on Brazilian exports, and concerns over capital outflows. However, strong domestic interest rates, continued investor interest in high-yield Brazilian assets, and supportive external factors helped limit further depreciation.

Coffee Market Report 11/08/2025

This report covers the period from Monday 4th August to Friday 8th August and was written by Dave Rabbich.

Coffee Market

Arabica opened at 287.10 c/lb and began its journey over the course of the week to hit its 300 c/lb bullish target. This was helped on its way by significantly below average rainfall in Brazil’s Minas Gerais region during the 1st week of August and the fact that certified Arabica stocks have fallen to a 14 month low. It first briefly reached 300 c/lb on the 6th before retracting to end the day down. This testing of the resistance level seemed to be enough, and on Friday, it made a significant climb and ended the week at 309.35 c/lb after Thursday saw the Brazilian Real strengthen against the dollar, which discouraged export selling. However, a harvest completion, slightly faster than last year, is putting downward pressure on prices. Sources showed that 99% of the robusta harvest and 91% of Arabica were complete as of 6th August

On the Robusta front, recent rains in Vietnam are doing well for the upcoming crop.

Origin

Trump announced a temporary trade deal with Indonesia, lowering tariffs on Indonesian exports to 19%, down from a threatened 32%. In return, Indonesia agreed to buy U.S. energy, farm products, and Boeing jets. Indonesian coffee was not exempted from the new tariff. The U.S. imported about 726,000 60-kg bags of Indonesian coffee in the 2024/25 season. Indonesia is the world’s fourth-largest coffee producer.

China are involved in the tariff game too, as it’s been reported that officials are planning to eliminate all tariffs on imports from the 53 African countries with which it maintains diplomatic ties. It has been predicted that the decision could ultimately boost the African coffee sector by expanding export channels to China, which is proving to be a rapidly growing market.

COT & certified stocks

↓ The Non-commercials increased their overall net long to 16,310 futures lots.

↓ The Commercials reduced their net short to -48,352 futures lots.

↓ Overall, Open interest rose to 155,650 futures lots.

Certified Arabica stocks sat at a 14 month low 738,095 bags and Robusta at 70,000 MTs.

Currency & Macro Outlook

On Wednesday, 6th August, Trump 50% Brazil’s tariffs on Brazil came into effect. The coffee market is still waiting for clarity as to whether coffee will become exempt from this. The tariff could hurt sales of Brazilian coffee to the US and boost Brazil’s coffee inventories. Commodity Analyst Judith Ganes has suggested that the US Administration is set to use coffee tariffs as a bargaining chip against the Brazilian government.

The Dollar fell against the Euro and the Pound during the week as turmoil persists between Trump and the Fed and their opposing views on interest rate cuts. Trump wants to see them slashed to 1% so his government can borrow money more cheaply to fund the increasing deficit as a result of his upcoming tax cut bill.

At the end of the week a euro was worth 1.16 dollars and a pound was worth 1.34.