Coffee Updates

Stay up to date with the latest news and updates in the coffee industry.

Coffee Market prices retrace to April '25 levels...

 

As everyone knows it has been a volatile year on many fronts.

 

We saw coffee prices retrace in November and December to the April '25 dip. This is good news as we start to contract new contracts for the new crop year of 25/26 harvests.

 

As we look back at 2025, I wanted to provide a comprehensive update on the green coffee market, specifically regarding North American availability and the pricing trajectory we expect as we move into 2026 and 2027.

The last five years have been defined by unprecedented volatility—driven by a "perfect storm" of climate anomalies, logistic bottlenecks, and geopolitical shifts. While we are seeing signs of a shifting tide, the market remains complex. Below is our analysis of where we stand and where we are headed.

 

Current Landscape (Late 2025)

Status: Historically High Prices & Tight Availability

We are currently navigating a period of sustained high prices, with Arabica futures consistently testing levels between US$3.50 and US$4.40/lb. This is largely due to:

• Supply Deficits: We are closing out a fourth consecutive year of global supply deficits.

• Origin Struggles: Brazil has faced severe drought and fire conditions earlier this year, while Vietnam (the world’s top Robusta producer) is recovering from significant drought that curbed yields. Tropical typhoon damage in Sumatra has wiped out massive infastructure and an estimated 30% of this years crop production and possibly 20% of future production dues to damaged coffee trees.

• Low Inventories: Certified stockpiles in consumer markets like North America have remained near historic lows throughout 2025, keeping spot differentials high.

 

The "Why": Persistent Drivers

The volatility we are seeing is not isolated but the result of compounding factors over the last half-decade:

• Climate Change: Erratic weather patterns (El Niño/La Niña) are no longer anomalies but the norm. The shrinking window for "perfect" growing conditions is keeping a permanent risk premium on prices.

• Logistics: While the acute port congestion of 2021 has eased, structural issues remain. Instability in the Red Sea and drought-driven restrictions in the Panama Canal continue to add transit time and insurance costs to shipments destined for North America.

• Tariffs & Regulation: Trade uncertainty remains high. The potential for new tariffs and the shifting timeline of the EU Deforestation Regulation (EUDR)—now delayed to late 2026/2027—has created a "wait-and-see" approach that complicates long-term contracting.

 

Outlook: 2026 – 2027

Direction: Cautious Optimism for Stabilization

Analysts are divided, but the consensus leans toward a gradual softening of prices beginning in mid-to-late 2026, provided key harvests materialize as forecast.

• The Bullish Case (Prices Stay High): If Brazil’s 2026 crop faces late-season frost or if Vietnam’s recovery is slower than anticipated, prices will remain elevated. A fifth year of deficit would likely push the market into uncharted territory.

• The Bearish Case (Prices Normalize): Early forecasts for the 2026/27 crop year suggest a potential surplus of 7–10 million bags as Brazilian production recovers. If this supply hits the market efficiently, we could see prices correct down toward the $2.65 - $2.80/lb range.

• Availability: We expect North American spot availability to improve by Q3 2026 as logistics normalize and the delayed EUDR implementation temporarily reduces competition for non-European compliant beans.

Strategic Recommendations

Given this outlook, we recommend a balanced approach:

1. Cover Your Needs: Maintain coverage for Q1/Q2 2026 to insulate against short-term volatility.

2. Wait on Long-Term Volume: For late 2026 and 2027 needs, consider floating a portion of your volume or using options, as there is a strong possibility of a better entry point surfacing in the next 6–8 months.

3. Diversify Origins: Relying heavily on a single origin (like Brazil or Vietnam) exposes you to climate risk. We can help you identify substitute origins that offer similar cup profiles at more stable differentials.

I would be happy to schedule a brief call to discuss how these global trends specifically impact your current inventory position and upcoming contracts.

 

 

 

As a Canadian green coffee wholesaler, we anticipate that coffee prices will remain unstable for the next 12 months, making it more important than ever to stay informed about industry developments.

We have multiple containers arriving direct to Canada to keep our Canadian customers stocked with green coffee for the year to come.

 

Keep checking our IG and Facebook for the latest news and insights.

 

All the best,

 

ROOT 86 Coffee

Dear [Client Name],

As we approach the end of 2025, I wanted to provide a comprehensive update on the green coffee market, specifically regarding North American availability and the pricing trajectory we expect as we move into 2026 and 2027.

To better illustrate the complex factors at play, I have included visual aids below mapping both the historical price volatility and the shifting demand landscape.

Current Landscape & Historical Context (Late 2025)

Status: Historically High Prices driven by Climate Risk Premium

We are currently navigating a period of sustained high prices, with Arabica futures consistently testing levels between $3.50 and $4.00/lb. We are closing out a fourth consecutive year of global supply deficits due to severe drought in Brazil and recovery challenges in Vietnam.

The chart below illustrates how the "floor" price of coffee has risen over the last five years. Volatility shocks (like the 2021 frost) are now resolving at higher baselines due to permanent climate risk pricing.

 

Graph

 

Analysis: The current peak in late 2025 reflects near-historic low certified inventories in consumer markets. The fork for 2026/27 indicates our current uncertainty: a return to normal weather could bring us down toward $2.65 (solid line), while continued climate disruptions will maintain the $3.50+ status quo (dotted line).

The Demand Factor: The "China Effect"

While supply constraints are the primary driver of current prices, the pressure is compounded by relentless demand growth. Even as prices rise, global consumption has not significantly retracted.

A critical structural shift in the market is the accelerating adoption of coffee culture in Asia, specifically China. China has rapidly moved from a tea-dominant culture to one of the world's largest coffee importers in a very short span. This new demand centers heavily on premium Arabica, competing directly for the same beans desired by the North American specialty market.

VISUAL AID 2: Global Consumption Growth & Emerging Markets (Stylized representation of Global Demand in Million 60kg Bags)

Plaintext

Million Bags 180 | 175 | [TOTAL DEMAND] 170 | ____/ 165 | ____/ | 160 | ____/ | <-- CHINA & 155 | ____/ | EMERGING ASIA 150 | ____/ | (Rapidly Expanding Share) 145 | ____/ | 140 |___________________/____________________________|____________________ | 2020 2021 2022 2023 2024 2025(E)

Analysis: While traditional markets (NA/EU) show stable, mature growth, the steep trajectory of China’s consumption means that even when Brazil has a "good" crop year, the surplus is absorbed much faster than it was a decade ago, preventing deep price crashes.

Outlook: 2026 – 2027

Direction: Cautious Optimism for Stabilization

Despite strong demand, the consensus among analysts leans toward a gradual softening of prices beginning in mid-to-late 2026, provided key harvests materialize as forecast.

• The Bearish Case (Prices Normalize): Early forecasts for the 2026/27 crop year suggest a potential global surplus of 7–10 million bags as Brazilian production recovers from the 2025 drought. If this supply hits the market efficiently, we could see prices correct down toward the $2.65 - $2.80/lb range.

• Availability: We expect North American spot availability to improve by Q3 2026 as logistics normalize further in the Panama Canal and Red Sea regions.

Strategic Recommendations

Given this outlook, we recommend a balanced approach:

1. Cover Your Needs: Maintain coverage for Q1/Q2 2026 to insulate against short-term volatility.

2. Wait on Long-Term Volume: For late 2026 and 2027 needs, consider floating a portion of your volume. As Visual Aid 1 suggests, there is a strong possibility of a better entry point surfacing in the next 6–8 months.

I would be happy to schedule a brief call to discuss how these global trends specifically impact your current inventory position and upcoming contracts.

 

Best regards,

 

As a Canadian green coffee wholesaler, we anticipate that coffee prices will remain unstable for the next 12 months, making it more important than ever to stay informed about industry developments.

We have multiple containers arriving direct to Canada to keep our Canadian customers stocked with green coffee for the year to come.

 

Keep checking our IG and Facebook for the latest news and insights.

 

All the best,

 

ROOT 86 Coffee

 

 

The above news article talks about the direct effect of US tariffs on coffee growing countries and how that may impact our Canadian coffee industry.

 

Coffee prices continue to surge as growing regions see climate extremes

Local coffee shop owners ask for continued support as the price for raw beans stays high, that will trickle down to an increase in prices at local coffee shops.

What's New!!

 

 

 

We landed our latest container of our signature Organic Peru RFA Women's lot into our Western warehouse this month, we have lots in stock in all our warehouses including our Quebec warehouse in Levis.

 

Ce mois-ci, nous avons reçu dans notre entrepôt de l'Ouest notre dernier conteneur de notre lot phare de produits biologiques du Pérou RFA pour femmes. Nous avons des stocks importants dans tous nos entrepôts, y compris celui de Québec à Lévis.

New Organic Women's lot from Peru