The global coffee market experienced notable fluctuations last week as New York coffee futures continued their upward momentum. Opening at 317.00 cents per pound, prices peaked on Thursday above 340 cents before closing the week at 325.00 cents. This performance reflects a strong bullish sentiment, driven by investor optimism despite factors that might have otherwise suppressed prices.

While the US Dollar Index strengthened, a development that typically encourages export sales and applies downward pressure on prices, the market remained resilient. Additionally, the European Union’s decision to delay implementing its anti-deforestation regulations (EUDR) by another year—allowing non-compliant coffee into European markets—did little to alleviate market tensions. Instead, production challenges remain the dominant narrative shaping the coffee trade.

In Brazil, adverse weather conditions continued to impact 2025/2026 crop projections, further fueling concerns over supply shortages. Volcafe’s reports project a global deficit of 8.5 million bags, marking the fifth consecutive year of shortages, even as production increases are anticipated in Colombia and Indonesia. This reality has led exporters to act cautiously amid extreme market volatility, while buyers prioritize short-term purchases, hoping for improved conditions ahead.

Ethiopia faces a difficult season as prolonged rains have affected crop quality and volume, particularly for premium-grade coffee. Meanwhile, in Indonesia, rainfall has disrupted harvesting and drying processes, while robusta prices remain steady despite declining export figures compared to the previous month.

Vietnam is also grappling with challenges, with December exports estimated between 1.6 and 2 million bags—well below the four-year average. Heavy rains have delayed harvesting and port operations, but the government has launched a database system for coffee-growing areas and forests, aiming to align with future EUDR requirements and secure its position in European markets.

On the macroeconomic front, the US Dollar Index neared a two-year high but pulled back due to political uncertainties surrounding a potential government shutdown. Weak economic data and the Federal Reserve’s 25-basis-point rate cut added further pressure, while the British pound slid to 1.247 against the dollar, its lowest level since May 2024.

As the year draws to a close, the coffee market remains in a state of anticipation, with traders and investors closely monitoring developments in Brazilian crop production and global supply conditions. While bullish sentiment dominates, the market remains susceptible to sudden shifts that could reshape the global coffee landscape.