Navigating the Coffee Market as a Specialty Roaster – Webinar Highlights
Navigating the Coffee Market as a Specialty Roaster Webinar Summary
featuring Albert Scala, Senior Vice President of Trading, StoneX Financial
Key Takeaways
· Coffee prices see historical volatility with daily price swings exceeding 3%
· Weather is the most significant variable for 2025 Brazil crop success
· Hedging is no longer optional; it is critical for success in today’s market
Unprecedented commodity price swings and global uncertainty have specialty coffee roasters facing one of the most volatile trading environments in history. The recent convergence of weather conditions, economic stresses, and trading disruptions have simultaneously affected the coffee supply chain, creating a perfect storm of volatility.
In this two-part webinar, 33-year StoneX veteran Albert Scalla, Senior Vice President of Trading, explores the complex interplay of macroeconomics, weather, freight, and tariffs reshaping the coffee landscape, and offers insights on how roasters and producers can protect their margins and manage risk.
Record-breaking prices for Arabica at $4.40/lb and Robusta at $5,800/ton have not been driven solely by inflation, economic instability and trade tariffs, but also by unstable weather patterns. From droughts in Vietnam to Brazil’s triple freeze, nothing can affect the success or failure of tropical agricultural crops like weather.
Understanding the structure of these global markets is essential. Coffee pricing is a blend of futures and differentials; knowing how to manage both effectively can give roasters the edge they seek. Scalla explains that in today’s market hedging is no longer an option for success; it is part of a successful strategy. With daily price swings exceeding 3% and logistical costs as unstable as ever, options and futures provide participants more than price protection; they offer tools for added supply chain flexibility. The best way to navigate this new reality is not to try and predict the market but to prepare for it. StoneX’s fractional hedging allows clients to fix prices even in small volumes. Currency hedging and customized strategies are also imperative for navigating global sourcing challenges.
StoneX has downgraded its Brazilian production forecast by over 4 million bags this year, adding to price and supply uncertainty. The threat of tariffs continues, with the current pause on implementation set to expire on July 8. As a result, members of the supply chain will likely continue to see historic volatility.
Looking to the near future, weather will continue to play the key role in crop failure or success. The Brazilian winter from May to July brings the risk of frost, while the return to neutral El Nino-La Nina conditions sets the stage for more volatility into flowering and harvest season.
Scalla explains how StoneX’s Brazil-focused research division now offers detailed, rolling crop estimates throughout the year, from flowering assessments in November to final yield reports in August. Reporting and real-time data has also become essential in this marketplace, as even small production shifts can trigger major price movements.
Scalla offered solutions for how specialty roasters can build a flexible risk strategy, explore how differential pricing reacts to local market forces, and outline practical steps to access risk tools regardless of business size.
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View full webinar here:. https://stonex.wistia.com/medias/0oxxaetirq
The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss. Past results are not necessarily indicative of future results. Futures and Options on Futures trading services are provided by the FCM Division of StoneX Financial Inc (“SFI”) (NFA ID: 0476094). Over-the-counter (“OTC”) products or swaps trading services are available through StoneX Markets LLC (“SXM”) (NFA ID: 0449652). SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. SFI and SXM are wholly owned subsidiaries of StoneX Group Inc.
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