MILAN – Coffee futures markets fell yesterday, driven by a stronger US dollar, which hit a two-week high against the Brazilian real. On Thursday 14 May, the contract for July delivery in New York fell by 1.8% to close at 275.70 cents, having spent most of the session trading in negative territory. London was also lower: July ICE Robusta coffee futures ended the session at $3,487, down 2% from a seven-week high reached on Wednesday.
Macroeconomic tensions remain unchanged. In terms of weather, attention remains focused on Brazil, where a cold front has brought rain to Minas Gerais, São Paulo and Espírito Santo.
The risk of frost in the coffee belt has been ruled out for the time being. Progress on the Robusta harvest, particularly in Espírito Santo, is beginning to put pressure on the domestic market, where physical trade continues to be slow and market participants remain cautious.
The Arabica harvest will get into full swing in the coming weeks and expectations remain very optimistic.
The picture is more nuanced for Robusta, where an abundant crop is expected, though likely to fall short of last year’s record output. In this regard, Cooabriel – Brazil’s largest coffee cooperative for Robusta– expects a partial decline in production this year due to the negative impact of the weather.
Mexico aims to boost production
Improved weather conditions, combined with investment driven by high prices, are reviving production in Mexico.
In its annual report released on Tuesday, USDA’s Foreign Agricultural Service revised its estimate for the current crop year upwards to 4.08 million bags, compared to 3.928 million in 2024/25. Arabica production remains stable at 3.58 million bags. Robusta production is on the rise, with an estimated 500,000 bags compared to 340,000 in 2024/25.
The USDA expects a 1% increase to 4.135 million for 2026/27, with an Arabica crop in line with this year’s and Robusta production rising further to 560,000 bags.
Around 80% of production comes from the states of Chiapas (Mexico’s leading coffee-producing state), Veracruz and Puebla.
Yields remain very low at just over six bags per hectare
Puebla, the state with the highest yields, has an average yield of just 13 bags per hectare. However, the situation is expected to improve thanks to investments made in recent years in new coffee rust-resistant varieties, better agricultural practices, and more effective quality control measures.
The entry into production of renovated areas and the shift towards more intensive farming methods are laying the foundations for a more productive and resilient model, says the report.
The expansion of Robusta production has been driven by major competitors in the coffee industry (particularly in the instant coffee sector), who encourage and support the cultivation of this variety. Robusta coffee can be grown at lower altitudes and in warmer climates, and is less vulnerable to adverse agricultural conditions.
Exports are expected to remain stable at 3.45 million bags this year, comprising 1.8 million bags of green coffee and 1.62 million bags of instant coffee.
The US remains the largest market for Mexican coffee, with exports reaching 2.6 million bags last year. In order to meet industry supply needs and domestic demand, Mexico imported over 2.6 million bags of coffee from international markets in the 2024/25 season, around 2 million of which were green coffee.
