STiR coffee and tea magazine

STiR coffee and tea 29 manufacturers create RTD & Instant products Gentle processing technologies helping Learn More flavourtech.com Are You Looking To Produce MARKET LEADING TEA & COFFEE? Scan the QR code to find out how Aroma Recovery & Brewing Extract Concentration Complete Processing Lines Aroma Concentration with HIGH IMPACT NATURAL FLAVOUR! Coffee shipments from Mexico and Central America rose 81.3%, from 0.45 million bags in December 2024 to 0.82 million bags in December 2025. Photo credit: Sheryl Maiorano Actual volumes delivered to the Board would also depend on the market structure, the steepness of backwardation or inversion between the nearby contract and deferred positions, and whether Brazilian coffee is at tenderable parity, meaning whether the Board is the most attractive buyer for this coffee relative to other cash-market offers. Should Brazil be a large deliverer, this would be the nail in the coffin for the market, as it would cause backward- ation to collapse and ease concerns about deliverable supplies, which have been a hallmark of the market for the past two years. Honduran differentials have also weakened, with some coffee likely to appear at the Exchange during the crop's peak harvest. Most recently, strength in the Brazilian real against the US dollar has led to a firming of the Brazilian differential, as producers reduce forward sales and hold back on inventory. This has been reflected in a more lim- ited export flow from Brazil. But this should not be misconstrued, as Brazil has depleted its coffee stocks and will have little coffee to ship before the new-crop arabica harvest becomes available in the third and fourth quarters of this year. If producers and exporters are holding back physical sales, it could have the opposite effect later, with a rush to sell coffee amid an improved supply outlook. The favorable weather now is also a boost for the 2027/28 vegetative growth. Logistics Issues Continue While the market is transitioning from a structural shortfall to a more balanced situation overall, that doesn't mean there won't be a few bumps in the road, with the issue of certified stocks being the most prominent. Logistics issues persist due to the diversion of Asia-to-Europe transit routes. There has been an increase in passage through various straits to the Suez Canal over the past sev- eral months, with no Houthi threats. However, recent attacks in Iran have led to the closure of the Strait of Hormuz and sovereign airspace over Qatar, the UAE, Saudi Arabia, and Kuwait. The drastic reduction of global air freight ca- pacity between Asia to Europe and the Middle East severely impacts air trade. While the disrup- tion of shipping through the Persian Gulf has once again caused logistics rates to spike.

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