GSX Monthly Coffee Report March 2026

Coffee supported by strong diffs, tight nearby supply, and firm spreads.

Farmer selling delayed - Brazil/Colombia producers well capitalised and holding back supply and waiting for a rally in flat price.

Medium-term pressure remains - coffee likely to soften as new crop arrives and supply normalises.

In late February and early March, New York coffee found support near the July 2025 lows. Paper coffee was the cheapest coffee available, and market participants at the NCA convention were looking for an oversold bounce. New York delivered that bounce, rallying more than 40 cents and retracing roughly 45% of the sell-off from late January.

The sharp 28-cent sell-off into late March, typical of coffee, whipsawed new speculative longs. In coffee, tops have historically been fast and violent, while bottoms tend to be slow and choppy.

In March, the Trump administration initiated what it described as a “military operation” against Iran, characterizing it as a “short-term excursion.” The U.S. dollar strengthened as short positions were covered and capital flowed into a perceived safe haven. A closure of the Strait of Hormuz would have longer-term implications for nitrogen fertilizer prices, freight rates, bunkering costs, and insurance.

In that environment, coffee already at destination, including certified stocks, is more attractive.

ICO export data for October 2025 through February 2026 showed exports up 2.472 million bags, or about 4.5% year over year.

The surge in other milds and robusta exports was not surprising. The January rally to $3.80 in New York and $3,900 in London broke Central American and Vietnamese differentials, helping boost export volumes.

New York certified stocks increased by 80,000 bags during March, with the builds concentrated in:

This came against a backdrop of rising exports from October 2025 through February 2026, with Honduran exports up 753,000 bags year over year and Nicaraguan exports up 374,000 bags year over year.

Absent a sharp move higher in price, New York certified stocks are expected to decline moderately over the next quarter. In retrospect, January’s AI rap song, “Hondos to Houston,” proved overly optimistic.

At the NCA, trade houses provided updated Brazilian and global balance sheet estimates. Most 2026/27 Brazil arabica estimates ranged from about 46.5 to 51.5 million bags, while conilon estimates ranged from 24.5 to 27.5 million bags.

The consensus appears to lean toward total Brazilian production somewhat above 75 million bags. Estimates for the global 2026/27 surplus ranged from 10 to 12 million bags, with the surplus concentrated mainly in arabica.

Many aspects of the market remain unchanged.

Destination stocks remain uncomfortably low. Tenderable-quality arabica differentials remain at premiums to the board. The same is broadly true for robustas, aside from modest discounts for conilons.

The trade remains short differentials at origin. This has been especially painful in Brazil, where short covering against first-half 2026 short-differential positions may have resulted in losses of 20 to 40 cents per pound. New York and London futures continue to trade well above the cost of production across all major origins.

The forward arabica-to-robusta ratio still does not reflect the arabica surplus ahead. Brazilian farmers remain the effective “longs,” extracting their price as the market moves closer to the new crop and the expected surplus.

The inversions in New York and London remain intact. As we transition into a 2026/27 Brazil surplus, pressure may ultimately fall on the December 2026 New York contract.

One potentially important factor to monitor is the longer-term weather outlook. Major meteorological agencies are tracking the transition from La Niña to ENSO-neutral conditions. The concern is that the world may experience a strong, possibly record-breaking, El Niño in 2026/27.

Strong El Niño events can result in:

NOAA / Climate Prediction Center (March 12, 2026)

WMO (World Meteorological Organization), February 2026

ECMWF (European Centre for Medium-Range Weather Forecasts)

One caveat is the so-called spring predictability barrier. Confidence in the forecasts should build meaningfully once we move past June.

Arabica Forward Curve:

Robusta Forward Curve:

Flat price:

Spreads Arabica:

Spreads Robusta:

Honduras and Indonesian Export pace: Honduras has been shipping more coffee faster this market year due to a favourable basis and weaker currency.