Market Insights

Date: 15 October 2025 (Nairobi time)

Below is a concise, data-focused market briefing comparing coffee market conditions in Brazil, Colombia, Ethiopia, Uganda, and Kenya, followed by near-term and 12-month projections and practical implications for Kenyan producers, exporters and roasters.

Executive summary (one-line)

Global coffee prices are elevated as Brazil faces dry conditions that threaten arabica flowering, inventories monitored by ICE/ICO have tightened, while Colombia and Ethiopia report strong recent production/exports with mixed outlooks, Uganda is enjoying a big export-earnings boost, and Kenya shows rising export value and strong auction prices but lower auction volumes.

Country snapshots (data + market drivers)

Brazil — largest producer; current downside risk to arabica

  • Recent below-average rainfall in Minas Gerais (20.2 mm for week to 11 Oct — ~48% of historical average) has triggered arabica crop concerns and pushed arabica futures higher. This is a primary driver of the recent rally in global arabica prices.
  • Several forecasts point to a smaller 2025/26 arabica crop vs prior expectations (analyst cuts / Rabobank scenarios forecast declines in arabica for 2025/26). Conab and market reports have reduced Brazil output estimates this season. This supports tighter global arabica balance sheets.

Implication: Tightening Brazilian arabica supplies = higher ICE arabica prices and substitution demand for high-quality coffees from other origins.

Colombia — very strong recent harvest, but a softer 2025/26 cycle warned

  • Colombia reported its best harvest in decades for Oct 2024–Sep 2025 (≈ 14.87 million 60-kg bags, +17% y/y), and export values jumped substantially. However, the Coffee Federation warns the 2025/26 cycle may be lower due to the natural biennial cycle and heavy early-2025 rains.

Implication: Colombia is a near-term supplier of additional washed arabica, but volumes may retreat next cycle — roasters should monitor Colombian crop-cycle signals for supply planning.

Ethiopia — record/near-record production outlook and specialty tailwinds

  • Multiple industry reports and market commentary forecast Ethiopia production around ~11.6 million 60-kg bags for 2025/26, with exports expected to rise and specialty demand growing. Ethiopia remains a structural supplier of high-value single-origin lots.

Implication: Ethiopia’s growing export volumes and specialty interest may capture premium flows; buyers seeking origin differentiation will compete for quality lots.

Uganda — strong export earnings and rising volumes

  • Uganda’s coffee export earnings have surged (reports show large increases in export value—e.g., exports worth ≈ $2.2 billion in the 12 months to Aug 2025 in some reports), driven by higher volumes and firm global prices. Domestic indicative prices remain relatively stable.

Implication: Uganda’s robust volumes (largely robusta) support global supply, and higher earnings help farm incomes; buyers of robusta will see tighter competition from East Africa as prices remain firm.

Kenya — higher export value, strong auction prices but lower auction volumes

  • Kenya has seen a sharp rise in export earnings and auction values in 2025 (first half exports value and recent NCE Sale 01 average price ~USD 375.24 per 50-kg bag reported for early Oct auction). However, weekly auction volumes have been low at times even as export volumes overall increased. Reforms and digital traceability (for EU rules) are actively changing the trade landscape.

Implication: Kenyan milds are capturing premium prices (benefit to farmers/exporters who maintain quality/traceability), but inconsistent auction volumes point to shifts in sales channels (direct sales, forward contracts) and the need for digital compliance (EUDR) preparation.

Price & inventory context (global)

  • ICE/NY arabica futures spiked on Brazil weather concerns; ICE-monitored arabica inventories have drawn down and are at multi-month lows, supporting upside in near-term prices. ICO composite indicators remain a useful global reference.

Projections & scenarios

Horizon definitions: Near-term = next 3–6 months (to Mar 2026). Medium = next 12 months (to Oct 2026). Projections are conditional and present ranges, not precise forecasts.

Near-term (3–6 months)

  • Price direction: Expect elevated arabica prices through the northern hemisphere Christmas and Q1 2026 window if Brazil’s flowering deterioration continues and inventories remain low. Robustas may follow but with smaller relative moves. (Bullish bias)
  • Supply flows: Colombia and Ethiopia will continue to supply significant volumes in the immediate term; however, Colombia’s next cycle may be lower, removing a future buffer.
  • Kenya impact: Kenyan auction prices likely stay firm (premium for washed milds), but exporters must manage logistics and compliance costs (EUDR / traceability), which could raise touch costs.

Medium (12 months)

  • Base case: Global coffee prices remain above the 5-year average but with volatility — weather in Brazil and growing robusta output (e.g., Vietnam, parts of Brazil) will determine whether prices moderate. ICO/USDA projections foresee world production rising modestly but with arabica more constrained; robusta gains could temper upside.
  • Upside scenario: If Brazil’s arabica output falls significantly (larger than current cuts) and inventories remain tight, premiums—especially for specialty arabicas—could widen sharply; origin switching and more direct sourcing from East Africa would intensify.
  • Downside scenario: Good rains in Brazil during the current flowering/podding window or a large robusta crop globally could ease prices by late 2026.

Risks to monitor (high impact)

  1. Brazil weather during flowering — immediate driver of arabica prices.
  2. Trade policy / tariffs (e.g., changing U.S.–Brazil terms or other barriers) — can shift flows quickly.
  3. EUDR & traceability compliance — could raise costs and lock out smallholders without support.
  4. Colombia crop cycle — strong 2024/25 harvest but possible weaker 2025/26 reduces a key buffer.

Practical takeaways for Kenyan stakeholders

  • Farmers / Cooperatives: Emphasize quality, traceability (GPS, documentation) and EUDR readiness — this secures premiums as global buyers hunt for reliable origins. Consider aggregation/digital platforms to meet buyer requirements.
  • Exporters / Processors: Lock in offers selectively (blend spot purchases with forward cover), and leverage Kenyan flavor premiums while managing compliance costs and logistics. Monitor Brazil weather daily.
  • Roasters / Traders: Expect continuing volatility — diversify origin sourcing (Ethiopia, Colombia, Kenya) and be prepared to pay origin premiums for traceable lots. Consider longer lead times for contract fulfillment.

Key data sources used (selected)

  • Brazil rainfall / price movement reporting (Barchart, Yahoo Finance coverage).
  • Reuters (Colombia harvest and Brazil output forecasts).
  • DailyCoffeeNews / industry coverage (Ethiopia forecasts).
  • CNBC Africa / Uganda Coffee Authority / national sources (Uganda export earnings).
  • Nairobi Coffee Exchange, KilimoNews and Business Daily (Kenya auction & export value, Sale 01 data), Kenya Coffee School Market Insights