May 23 / Laleska Moda

Rains in Colombia affect the 25/26 season, but prices drop this week

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  • Colombia recorded higher-than-average rainfall in 2025. While the higher humidity initially benefited the trees, the excessive rainfall in the second quarter is already affecting the 25/26 Mitaca harvest. The adverse weather is also expected to impact the country's main cycle later this year.

  • With this in mind, we lowered our estimate to 12.4 million bags, a slight decrease from the 2024/25 season. This could affect Colombia's exports in the 2025-2026 cycle and impact the global balance.

  • Despite the more bullish view on the long-term, Arabica and Robusta’s contracts lost some ground this week, as pace of the harvests in Brazil and Indonesia increases. The USDA also released its first figures for the 25/26 season for both countries, indicating an increase in supply. For now, our estimates remain unchanged.

  • Arabica and Robusta certified stocks also showed some significant recovery in May, especially the latter, with more Indonesian and Vietnamese beans sent to ICE.

  • Besides the supply, this Thursday, the ABIC (Brazilian Coffee Industry Association) pointed to a decrease in coffee retail sales from January to April in Brazil – the second largest consuming county of coffee.

Rains in Colombia affect the 25/26 season, but prices drop this week

Rains continue to pour on Colombia’s coffee growing regions, already impacting the 25/26 Mitaca harvest – the secondary crop. Not only the wetter climate has been affecting the fieldwork, but it already expected negative impacts in the main cycle in the country, currently under development. So, while we initially anticipated an increase in production in the largest washed Arabica producer in the 25/26 season (to 12.9 M bags), we now have downgraded our estimates to 12.4 M bags, a small drop of 0.7% from 24/25.

A smaller crop is also likely to limit exports in the 25/26. With this, we total shipments to reach 13.1 M bags, 4.6% down from 24/25, the country should also continue to rely on imports to reach the expected exports figures. Last week, the USDA (U.S Department of Agriculture) also published its first figures for the 25/26 season. The report also highlighted a decrease of 5.6% in the next season, to 12.5 M bags, reflecting the heavy rainfall effects in the flowering phase of the crop, with a decrease of 4.1% in exports, to 11.8 M bags.

Colombia: Cumulative Precipitation in Coffee Areas (mm)

Source: Refinitiv

Colombia: Coffee Supply and Demand (M bags)

Source: Hedgepoint

Regarding our figures, with the drop in Colombia we also reviewed our global balance, which now points to a deficit of 800,000 bags in 25/26. Despite this bullish outlook in the medium to long-term, future prices have dropped in the past few days, reflecting the perspectives of improving supply in the coming months, as the harvests in Brazil and Indonesia gain pace.

In Indonesia, the 25/26 harvest is picking up speed, and more coffee is becoming available on the market. This is also reflected in the recent decrease in Asian differentials. Interestingly, the drop in Indonesian and Vietnamese differentials has led these countries to send more coffee to ICE-certified stocks, which are currently recovering. Arabica certified stocks also improved in May, with an increase in volume from Central American origins.

Global Coffee Balance (M bags)

Source: Hedgepoint

LN – Robusta (USD/mt), NY – Arabica and Arbitrage (c/lb)

Source: LSEG

Meanwhile, the current dry weather in Brazil is favorable for fieldwork, and the harvest rate is likely to increase until the end of this month. More coffee will hit the market in June. Additionally, despite the recent forecast of lower temperatures in some coffee-growing regions, there is still no risk of frost in the short term, which could contribute to a more bearish outlook.

Data on Brazil’s demand has also dragged the market down this week. On Thursday, 22, a new report published by the Brazilian Coffee Industry Association (ABIC) pointed to a decrease of 5.13% in retail sales of coffee in the country between January and April. While the year started with a rise in sales, March and April results were below 2024 levels, likely reflecting the rise in prices. According to ABIC, all categories of coffee showed an increase in prices, with traditional blend up 49.8% and soluble with a rise of 85.1%. On the other hand, 2024 was marked by an increase in domestic demand in Brazil.

Arabica Certified Stocks (‘000 bags)

Source: ICE

Robusta Certified Stocks (‘000 bags)

Source: ICE

In Summary

Heavy rains in Colombia until this month led us to lower our estimates for the 25/26 season. Not only is the Mitaca harvest being affected, but the main cycle could also be impacted. With this in mind, we also slightly lowered our balance for 25/26.

Despite our bullish outlook for the medium to long term, Arabica and Robusta prices are under pressure as the harvests in Brazil and Indonesia gain pace. Higher supply in Indonesia has pressured Asian differentials. This, in turn, has favored a recovery in Robusta’s certified stocks. In Brazil, current weather is favoring the pace of the 2025/26 harvest. However, recent news from ABIC points to a decrease in demand in 2025 due to higher prices. This will likely keep prices under pressure in the short term.

Weekly Report — Coffee

Written by Laleska Moda

laleska.moda@hedgepointglobal.com

Reviewed by Carolina França
carolina.franca@hedgepointglobal.com
www.hedgepointglobal.com

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