Coffee Market Commentary: October Recap
October was quite a month for the coffee industry. Industry professionals monitored weather in key growing regions, ongoing logistic challenges, balance sheet assessments, and, of course, tariff impact.
The market struggled to find direction throughout the month and was highly volatile. From a bullish standpoint, there is most certainly a lack of coffee in the short term. This shortness of availability is confirmed by the structure of futures prices, with the market remaining in a backwardation scenario (where the near-term contract is trading at higher prices than farther out contracts.) In recent weeks, the difference between the first and second contracts in New York has increased significantly. While in early September the spread hovered around US¢ 11 per pound, by the end of October this difference had exceeded US¢ 22, reaching US¢ 22.75 in the session on October 20. This increase reflects the short-term supply restriction scenario, directly related to tariffs and the decline in certified stocks.
Certified arabica coffee stocks have been showing a sharp decline. By the end of October, certified stocks were less than 450,000 bags, representing a drop of nearly 26% compared to the previous month. The decline is more pronounced for coffees of Brazilian origin. At the beginning of 2025, Brazil’s certified stocks reached 630,000 bags but currently stand at just over 26,000, a drastic reduction. This movement is linked to price differentials in the origins. At current levels, there is no economic incentive for producers or trading companies to certify coffee on international exchanges, which reinforces the tight supply scenario and pressures the nearby contract prices.
Tariff uncertainties have been incredibly impactful for the market during October. A meeting between President Trump and Brazilian President Lula resulted in a positive discussion and signaled progress towards a possible resolution. For Colombia, however, the outlook doesn’t look quite as optimistic. Colombia accounts for about 20% of US coffee imports.
Bearish fundamentals such as much needed rainfall in Brazil and a pickup of selling from Vietnam ahead of the start of the new harvest saw the market correct lower. However, beneficial weather conditions were short lived, and the last weekend of October brought hail storms to Brazil and a destructive typhoon to Vietnam. Impact to the crops are still being assessed.
Unfortunately, the unknowns should continue into November. The market will be digesting news of tariffs, most likely a first round of estimates for Brazil’s 2026 crop, harvesting progress in Vietnam and critical development phases in many of the other major producers.
Stay informed on the ever-evolving coffee market with daily updates and insights —subscribe to StoneX's Coffee Market Intelligence.
