Market Update: February 3rd 2025

Coffee Mar '25 (KCH25)

USD/lb $377.85s +4.45 (+1.19%) 01/31/25 [ICE/US]

AUD/kg $13.41

Robusta Coffee 10-T Mar '25 (RMH25)

USD/MT $5,718s -16 (-0.28%) 01/31/25 [ICE/EU]

AUD/kg $9.21

Coffee prices of Arabica at all time high

Coffee futures have reached historic high on 31st of January (US time), rising for the eighth consecutive session (+50.05 USD cents since the 22nd of Jan), with the March 2025 contract reaching a high of 381.05, and closing at 377.85. On Thursday 30th Jan, trading volumes were robust, exceeding 50,000 lots, the highest since December 19th. While origin selling slowed, roaster buying for end-of-month commitments increased, with deferred contracts also seeing more activity.

Stock levels and production concerns as main drivers of rising C-price

Vietnam

Vietnam's coffee production for 2024 is expected to decline by 5-10% to 25-26.5 million bags due to extreme weather and farmers shifting to higher-value crops. However, a 10% recovery is forecasted for 2025, with production reaching 28-29 million bags. Both domestic and international demand, especially to China, are set to grow.

Brazil

In Brazil, coffee inventories remain tight due to a forecasted 10% drop in Arabica production, though Robusta output is expected to rise 21%. Brazil’s 2025-2026 harvest faces challenges from severe drought and logistical delays. Despite this, Robusta production is anticipated to rise, driven by higher demand for Canephora blends.

Colombia

In Colombia, political tensions with the U.S. have raised the possibility of decertification due to rising illicit coca cultivation. This could impact Colombia’s coffee exports, which were worth $1.29 billion in 2023. Colombian coffee prices have reached a record high due to a combination of factors, including soaring international coffee prices, a weakened Colombian peso, the pressure for traceability compliance of the European Union’s Zero Deforestation Pact, and a potential reduction in global supply from Brazil and Vietnam. Local coffee prices are now surpassing production costs, with growers benefiting from the surge.

Coffee Stocks in European Ports Jump 25% Year on Year

The European Coffee Federation (ECF) revealed that coffee stocks in December, in key European ports, totaled 546,124 tons (9.1 million 60-kg bags), marking a 25% increase from the 437,059 tons (7.3 million bags) recorded in December 2023.

Economy data

Inflation

Coffee prices have remained elevated globally, with U.S. coffee inflation slightly decreasing to 11.2% in December. In the EU and Brazil, coffee prices have continued to rise, reflecting persistent inflation in major consuming regions.

Currency AUS/USD

The AUD currency against USD remains weak, hitting 0.613 at its lowest and 0.633 at its highest this month, today sitting at0.621 and adding pressure on Australian roasters.