May 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

This report covers the period from Monday 11th May to Friday 15th May and was written by James Duncan and Hannah Wakefield.

The Arabica market opened the week at 275.70 usc/lb and quickly fell to 268.00 usc/lb, its lowest level since August 2025. Friday’s COT report showed non‑commercials increasing their net long position by 2,434 bags week-on-week, which was cited as a trigger for the sell-off. However, buying interest from commercial players below 270 usc/lb helped stabilise the market. After the first hour, prices rebounded as speculators refocused on the size of commercial short exposure. This was supported by tight certified Arabica stocks, which were reported to be at a 2.5‑month low.

Monday proved to be the only day the market posted gains vs open. Tuesday and Wednesday tested both sides: Tuesday fell to 275.65 before recovering, and Wednesday rose to 286.70 before falling back. Both sessions ultimately closed about 2 usc/lb below their opens. A sudden spike in the USD/BRL pair prompted a sell off on Thursday, closing pleasingly at 275.70, exactly Monday’s open. With a weaker BRL, Brazilian exporters are encouraged to sell their inventories as the resulting value in their local currency increases for the same price in USD. The sell off continued Friday, underpinned by the expectations of a bumper crop in Brazil as has been touted for many months now. The market closed the week at 266.90 usc/lb, 8.8 usc/lb lower than week open, with a range of 21.15 usc/lb.

Currency & Macro

Following the previous week’s local election results, UK Prime Minister Keir Starmer came under renewed political pressure, weakening GBP amid rising concerns over instability. The yield on 30-year guilts (UK government bonds) surged in anticipation of leadership challenges, as many of the expected challengers are expected to increase public spending if they take the helm. This was coupled with the news last week that UK borrowing costs have reached a 28-year high.

The weakening of the GBP was amplified by comments from Donald Trump suggesting the US–Iran ceasefire remains fragile, prompting investors to shore up in the USD. As the conflict drags on, with continual delays to any deal between the US and Iran, many are unwilling to expand into riskier assets and currencies.

The GBP/USD pair started the week around 1.360 and closed closer to 1.335. The EUR/USD pair started the week around 1.775 and fell to 1.165 by the end of the week.

Origin

The Coffee Board of India has forecast that total coffee production in India for the coffee year 2025/6 will increase by 10.9% compared to 2024/5. The Arabica harvest is expected to total 118,125 MT, up by 11.8%. Whilst the Robusta harvest is predicted to reach 284,875 MT, an increase of 10.5%. This is a positive sign, although analysts are urging caution as the El Nino phenomenon is expected to return, and likely to be of high intensity, a Super El Nino, peaking during the Northern Hemisphere Autumn. This will disrupt global weather patterns significantly, likely to cause drought and flooding across the world, which will no doubt have a knock-on effect on the coffee harvest, very likely reducing the crop volume.

EUDR has loomed on the horizon of the coffee world for several years now, and some are more prepared than others. The majority of the work EUDR requires falls on origin countries. Colombia, however, are well prepared. The Federation Nacional de Cafeteras (FNC) has developed a centralised georeferenced database, the Coffee Information System (SICA), which has been designed to help coffee producers and exporters in Colombia provide full traceability on their coffee, which in turns allows them to comply with the new regulations. This database will become a crucial resource when EUDR comes into effect. Colombia is currently the third biggest producer of coffee in the world, and an estimated 70% of its coffee is grown by smallholder farmers, making the supply chain highly complex. Without the SICA database, EUDR would have proved an even bigger challenge.

The link between Ethiopia and China has grown closer with the implementation of a trade agreement which has removed all import tariffs on goods exported from Ethiopia into China. As Ethiopia is the largest coffee producer in Africa, and Chinese consumption of coffee has grown 15% compared to last year, no doubt this new trade agreement will see more Ethiopian coffee being exported to China. The Ethiopian Coffee and Tea Authority has reported that in the first 9 months of the 2025/6 financial year, coffee exports have increased by 40% year-on-year. As a result of the huge increase of Chinese interest in Ethiopian coffee, the Ethiopian government are working on improving their infrastructure and modernising the railway link between Addis Ababa and the Port of Djibouti, to try and keep up with demand of exports.

Coffee Market Report

This report covers the period from Monday 4th May to Friday 08th May and was written by James Duncan and Hannah Wakefield.

Coffee Market

The market opened on Monday 4^th at 287.10 usc/lb and saw reduced volume as many Europeans countries observed the May Day Bank Holiday. With a strengthening Brazilian Real, the market ticked up slightly on Tuesday before momentum buying escalated the price up to 297.20 usc/lb. Without much clear fundamental activity, the market receded in the final hours to close out Tuesday just below 290.

After failing to hold above 290 usc/lb on Tuesday, the overarching bearish sentiment took hold on Wednesday, driving the market down to 283.85 usc/lb. The momentum continued Thursday before commercial buying provided resistance as the market hit the lowest level since the end of Feb (271.35 usc/lb). Friday saw a reversal in early trading, hitting highs of 278.45 usc/lb before settling just 1.55 usc/lb above Thursday, closing the week at 274.80 usc/lb (12.30 usc/lb down on Monday open).

Currency and Macro

The USD began the week in a strong position, with the DXY sitting around 98.5. As a ‘safe haven’ currency, and a net oil exporter of oil, geopolitical tensions in the middle east often play to the USD’s favour when compared to other currencies. This paired with expectations that the Fed will hold rates have been supportive of the USD.

Going into Tuesday, the GBP/USD and EUR/USD pairs sat below 1.355 and 1.170 respectively, but by mid Wednesday both had firmed to 1.362 and almost 1.18. This was mostly driven by promise of a final deal between the US and Iran, driving down oil prices and bringing the USD with it. Confidence in a deal was eroded later in the week, with Iranian officials denouncing several elements of the peace plan. The DXY still closed the week below 98, with the GBP/USD and EUR/USD pairs sitting around 1.362 and 1.775 respectively.

Origin

Honduras is predicted to produce a bumper crop this year (2025/6 crop year). A report released by the Foreign Agricultural Service of the US Department of Agriculture estimates this crop to reach 5.53 million bags, a 6.3% increase in volume from the previous crop. Predictions for the 2026/7 crop go even further, currently estimated at 6.03 million bags.  IHCAFE, the Honduran Coffee Institute, attributes this projected growth to improved plant nutrition, pruning and crop management practices, as well as the maturation of newly planted areas. Whilst this is good news from Honduras, there are concerns in the country about the increase in instance of Coffee Leaf Rust, a disease that reduces a tree’s yield. As of March 2026, the average incidence was 8.44%, compared to 7.57% last year.

China and Chinese coffee is ever increasingly become an origin to watch. Yunnan Province, best know for cultivating tea, is the main engine of Chinese coffee production, producing 98% of Chinese coffee. A province in Southwest China, it is about 10% larger than Germany, with a population 46.7 million, making it a staggering 9 million people more populous than the most populated state in the USA, California. Development of coffee production in the region has grown at a fast rate, as have the international exports. In 2024, exports of Yunan coffee increased by 358% compared to the previous year. If China continues on its growth plan, within 10 years it is likely to become the world’s second-largest growing region, surpassing Colombia.  On top of this plan to plant more and more coffee, China is also investing in the China-Europe Railway Express, undercutting traditional shipment times to Europe significantly. By train, a journey from Yunnan to Germany can take as little as 15 days. Some analysts are warning that this huge surge of production in China could also keep the coffee market low, with supply outstripping demand. The implications of which for other producing countries may be severe.

In Indonesia exports have yet to recover since the hurricane and devastating flooding and landslides at the end of 2025. In March 2026, arabica exports were almost 60% below the same month in 2025, and 40% below the five year average. Sumatra was the worst hit region of the country, accounting for the majority of the lower export volumes. Other islands such as Java, Bali, Flores and Sulawesi were less effected, and their exports remain within the normal range. Shipments are expected to gradually build back up over the second half of the year as infrastructure is rebuilt.

Coffee Market Report

This report covers the period from Monday 27th April to Friday 01st May and was written by James Duncan and Hannah Wakefield.

Coffee Market

The market opened on Monday 27^th April at 292.00 usc/lb, and continued the downwards trend from the previous week, closing out at 288.50 usc/lb. Low commercial activity, a strong dollar, and expectations of a bumper Brazil crop provided pressure on the market. Tuesday saw prices climb back above 290 on news of limited certified stocks – with Arabica inventories reaching a two-month low. Wednesday traded flat – opening higher off the back of Tuesday but ultimately closing at the exact same level. After failing to break above 290, and with a DXY > 99, the market fell back into the 290’s on Thursday, closing out at 285.55 uscl/lb. Friday continued the downwards trend reaching lows of 281.30 usc/lb, but as the DXY started to fall this triggered some short covering in the market – pushing the price back up on close to 286.40 usc/lb.

Currency and Macro

Both the GBP/USD and EUR/USD pair traded within range for the first half of the week, with the GBP/USD pair averaging around 1.35 and the EUR/USD pair around 1.17. Thursday 30^th April marked what is likely Jerome Powell’s last interest rate decision as Fed chair, in a divided decision to hold interest rates where they are (3.50 – 3.75%). Predictions of inflation in light of the US-Iran conflict loomed over the board, which provided a boost to both the GBP/USD and EUR/USD which ended the week with highs of 1.365 and 1.177 respectively – with the DXY hitting lows of 98.

Origin

Agricultural drones are going from strength to strength, particularly in Brazil. At Agrishow 2026 in Ribeirao Preto DJI Agriculture, the leader in agricultural drone technology, released their latest insight report, which highlights how drones are more and more being integrated into policy and strategy across agribusiness. By the end of 2025, there were more than 600,000 DJI drones in operation, a staggering figure, the impact of which has been to saved approximately 410 million tons of water, the equivalent to the amount drunk by 740 million people in a year. The use of these drones has also cut carbon emissions by 51 million tons, which is the amount of carbon 240 million trees would absorb in a year.  The head of global sales at DJI, Yuan Zhang, has stated, ‘agricultural drones are no longer a novelty – they are essential farm equipment worldwide. In Brazil, DJI Drones are now widely applied on the country’s major crops, including coffee, soybeans, corn, sugarcane, and forage grass’. Drones are often used to apply fertiliser, and spray herbicides, and can do so on areas which need them with greater accuracy, therefore lowering the overall usage. Whilst drones offer many new solutions for problems faced in agriculture, they are not without their drawbacks. For example, they are significantly restricted by their battery life, often needing to be recharge multiple times a day. On top of this, they are often quite expensive, and their price tag is a barrier for many producers.

In Costa Rica the agricultural sector seems to be tentatively rebounding after a difficult year in 2025. In January 2026 agricultural industry grew by 2.8%, and in February 2026 by 1.4%, compared to a decrease of 4.4% and 3.7% in the same months in 2025. Whilst good news for the sector on the whole, the growth seems to largely be driven by short-cycle products such as potatoes and other vegetables and produce that is sold to foreign markets, such as tropical fruits. On the other hand, coffee is still struggling. According to the Central Bank of Costa Rica this is due to a drop in yield per hectare as a result of increased pests. However, producers are saying that is not the whole story. Ricardo Severs, the vice president of the Chamber of Coffee Growers has said that ‘the real “disease” that afflicts [coffee producers] is the low exchange rate’. Coffee is traded internationally in US Dollars, but coffee producers settle their expenses (e.g. supplies, transport, wages) in Colones, and the local cost of production is increasing. The unfavourable exchange rate is meaning many producers are making a loss, and Severs has suggested that soon it may be cheaper to buy imported coffee from Colombia than locally grown Costa Rican coffee.