Global Coffee Markets Face Supply Strains and Volatility as Harvests Progress
Coffee-producing regions around the globe are navigating a challenging season marked by delayed harvests, logistical bottlenecks, and fluctuating prices, according to reports from Week 48. As farmers and exporters contend with these hurdles, the market’s volatility continues to create uncertainty.
In Brazil, local coffee prices have surged, closely tracking movements in the New York coffee market. However, market activity remains subdued, with few sellers and growing concerns over the financial health of major export companies. Persistent logistical issues, including tight container availability and shipment rollovers, add further pressure to the supply chain.
Mexico and Central America are experiencing delays due to unseasonal rains, complicating exporters’ efforts to meet November commitments. The situation has been worsened by production setbacks in Peru, which have escalated demand for immediate shipments in the region.
In Peru, the challenges are acute. Early aggressive sales, coupled with an underperforming crop that fell 8% below expectations, have led to multiple defaults. Supply shortages have created one of the toughest years for the Peruvian coffee industry in recent memory.
Meanwhile, Kenya is witnessing its harvest at its peak, with milling activities ramping up. Logistics in the country are beginning to stabilize, with fewer disruptions in shipping schedules. Across Rwanda, favorable rainfall is supporting cherry growth, and an extended harvest season is expected to kick off in January in the Western Region.
In Tanzania, the Arabica harvest has concluded, with market activity shifting to milling and limited direct sales. The Robusta season is nearly complete, with 5-10% of the crop still unsold as traders bet on further price increases.
Uganda is facing mixed results this season. While Arabica yields have disappointed, with 85% of the harvest complete, Robusta production is off to a strong start. However, exporters are hesitant to make aggressive purchases, waiting for clearer demand signals.
In Indonesia, the Arabica harvest in Aceh continues steadily, though wet conditions have slowed coffee flow. Robusta farmers, buoyed by London’s price rally, have released significant quantities of coffee. Optimism is high for the next season, with promising cherry development in Southern Sumatra.
Vietnam, the world’s largest Robusta producer, has seen local prices climb sharply alongside the London market rally as its harvest begins. However, farmers remain cautious sellers, drawing on past trends of price increases during peak supply periods to hold out for higher returns.
Uncertain Market Ahead
This season’s challenges highlight the fragility of global coffee supply chains as weather disruptions, financial pressures, and logistical bottlenecks converge. While some regions are finding opportunities to adapt, market participants are bracing for further volatility in the weeks ahead. The stakes remain high as coffee remains one of the most traded commodities globally, underscoring the need for resilience in a fluctuating market.
