#036 - The NY Commodities Exchange Legacy vs. The Craft Future: Can Specialty Coffee Ever Untether from Futures Pricing?

Hi

These past weeks have been interesting.

In Brazil, the harvest is almost concluded after a certain delay. Buying coffee has not been easy. Producers are well capitalized and not comfortable following the volatility from NY C Prices. Indeed, it is even awkward to discuss about financial markets with people so focused on production and daily challenges.

In Europe, there is a broad wait-and-see approach. Inventory levels have been low for months. Very few buyers took advantage of the low prices between February and May.

Meanwhile, coffee prices seem more correlated to Bitcoin than to fundamentals. That explains a big part of our challenge: how to build loyalty in such a volatile environment. We believe in investing in AI and quality improvement technology to develop truly direct trade.

Since we must discuss NY trading prices with Brazilian producers, here is a curious history. Do you know why arabica coffee is traded in NY and not in Chicago or London, like most commodities?

In Chicago, there used to be two exchanges, CME and CBOT, which specialized mostly in grains and meat from the Mid-West USA. London has traded Robusta coffee, mostly from Vietnam. Meanwhile, coffee mostly arrived in NY from Brazil. As always, NY concentrates the liquidity and sets the standards. Much of the traditional industry is still organized around converting Brazilian production into a NY standard. These standards were mostly defined more than 100 years ago.

The specialty coffee breaks this pattern and creates huge impact. That is why specialty coffee is so cool.

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Weekly Highlights:

• Coffee Futures KC Price in NY: +6.84% weekly, closing at 339.65 cents/lb on 24/08/2026 (up from 317.90 cents/lb on 17/08/2026).

• Coffee Price in Brazil’s B3 in USD: +7.70% weekly, closing at 440.60 USD per 60kg bag on 24/08/2026 (up from 409.10 USD per 60kg bag on 17/08/2026).

• BRL/USD fx rate: +0.12% weekly (closing at ~0.1939 USD/BRL on 24/08/2026 vs. ~0.1937 USD/BRL on 17/08/2026).

• Proxy of 20’ container freight prices from Santos to Rotterdam: up ~1.4% weekly.

• Starbucks announced an expansion of its localized cold-brew portfolio in key Asian markets to capture peak summer demand and reverse shifting consumer preference trends.

• Major European roasters announced price adjustments to absorb ongoing supply chain volatility and higher import costs across Arabica producing regions.

• The Brazilian National Supply Company (CONAB) issued updated harvest guidance highlighting progress in Arabica picking across key growing regions like Minas Gerais.

• European Union regulators reiterated compliance deadlines for importing nations ahead of upcoming deforestation traceability mandates affecting coffee shipments.

• Premium home coffee machine maker De’Longhi expanded its direct-to-consumer digital channels to support sustained consumer demand for home espresso systems.

• Nestlé launched a strategic initiative targeting sustainable farm practices and yield resilience for smallholder coffee growers across East Africa and Latin America.

• Global shipping operators adjusted ocean freight capacity allocations on transatlantic routes connecting South American exporters to Northern European hubs.

• U.S. specialty coffee chains introduced plant-based and functional ingredient options to cater to younger demographics seeking health-aligned morning beverages.

• Vietnam and Indonesian trade groups reported updated export volume estimates for Robusta, further highlighting the global price spread between Robusta and Arabica varieties.

• Colombian coffee growers’ federations rolled out targeted tech-assistance grants to support smallholder producers against shifting local weather patterns.