Daily Coffee Report 8/5/26
Daily coffee report
StoneX Coffee Team
- Coffee
Coffee’s Stability Defies the Cocoa Meltdown
By: Editorial Team, StoneX Media
The sharp divergence between cocoa and coffee markets in 2025 underscored a fundamental truth of soft commodities: not all demand behaves the same. Cocoa’s 50% price fall reflected how substitution and industrial reformulation can unwind years of gains almost overnight. Coffee, however, proved remarkably stable, supported by deep-rooted consumption habits and limited alternatives. The contrast offers a clear view into how structural and behavioral factors can dictate volatility in agricultural markets.
Fernando Maximiliano, StoneX Brazil Market Intelligence Manager, and Lucca Bezzon, StoneX Brazil Market Intelligence Analyst, bring a dual perspective on how supply recovery, substitution, and weather patterns interact to drive both resilience and vulnerability across soft commodities.
Key Themes from the Discussion
- Cocoa’s downturn shows how substitution and demand destruction amplify price shocks.
- Coffee’s inelastic demand and cultural roots sustain stability even under pressure.
- Weather risks, tariffs, and speculative sentiment continue to shape Brazil’s soft commodity outlook.
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Substitution and Market Elasticity
As Lucca Bezzon explains, “the fall in cocoa prices is mainly linked to expectations of a surplus for the 2025–26 harvest”, amplified by substitution in confectionery production. Industrial users replaced cocoa butter with cheaper fats, reducing grinding activity and magnifying downside pressure. Coffee’s case is different. Fernando Maximiliano notes that “there is no way to substitute coffee for another product”, meaning consumption remains steady even as costs fluctuate.
Weather and Trade Risks on the Horizon
Looking to 2026, both analysts highlight the importance of weather and policy. Bezzon points to West African crop recovery as a potential stabilizer for cocoa, while Maximiliano flags Brazilian tariffs and El Niño patterns as key variables for coffee. As he observes, “tariffs on Brazil were bullish, but removal could turn bearish”, showing how trade shifts can alter fundamentals overnight. Both agree that structural consumption and regional weather will decide whether divergence persists or narrows next season.
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--- Written by Frederic Guetin, StoneX TV Producer
--- Experts: Fernando Maximiliano, StoneX Brazil Market Intelligence Manager; Lucca Bezzon, StoneX Brazil Market Intelligence Analyst
- Coffee
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