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Differentials on Colombian Continue to Rise in August
Coffee Network (Bogotá)- Colombian coffee differentials widened in August, supported by strong demand and persistent supply constraints, even as a sharp appreciation of the Colombian peso weighed on local currency returns for producers, the coffee growers federation said in its monthly report.
The premium for Colombian coffee averaged 66.67¢/lb over the ICE futures contract in August, up 2.6% month on month and 144.3% higher compared with the same period last year (2.4 times higher year on year). This marks the second-highest average differential for the month of August in the past decade, trailing only 2022 levels. Weekly differentials fluctuated between 65.0¢/lb and 70.0¢/lb throughout the month, consolidating gains achieved during the first half of the year.
Ex-dock prices reached a 10-year August high, averaging 385.9¢/lb. This represented a 2.0pc gain from July and a 9.4pc increase year on year.
At the New York exchange, the ICE KC C-contract averaged 344.6¢/lb in August—its highest August level in ten years—rising 6.8% from July and 0.9pc year on year. Futures prices found support from Brazilian harvest delays, producer holding behavior in Brazil, lower exchange-certified inventories, a steep front spread, and lingering risks of a strong El Niño climate event.
Peso appreciation dampens domestic returns
Despite gains in international markets, Colombian domestic coffee prices experienced year-on-year pressure due to foreign exchange movements. The domestic reference price averaged COP2.263 million per load (125kg), up 0.8% from July but down 17.9% compared with August 2025.
The monthly rise in local prices was driven by the 6.8% surge in the ICE C-contract, which offset the strengthening local currency. On an annual basis, however, the foreign exchange impact dominated: positive gains in the differential and benchmark futures failed to counter a steep appreciation of the Colombian peso. Nevertheless, the monthly average internal price remained the third highest for August over the last decade.
The official exchange rate (TRM) averaged 3,126.8 COP/USD in August, reflecting a 4.4% appreciation from July and a 22.8% strengthening from 4,051.6 COP/USD in August 2025. This marked the lowest monthly exchange rate average of 2026 and the lowest since March 2019 (3,125 COP/USD). FX dynamics were driven by oil price trends, interest rate differentials, and carry-trade capital inflows. During the final week of August, the peso pared gains, weakening back toward late-July levels as global oil prices fell and market expectations turned toward US Federal Reserve rate hikes.
Production and harvest valuation decline
Domestic production fell by 12.2% year on year in August to 1.09million 60kg bags. Rolling 12-month production reached 12.58million bags, down 15% compared with the previous 12-month period, though higher than the corresponding August periods in 2022, 2023, and 2024. Year-to-date production stood at 7.73 million bags, while crop-year production reached 11.44 million bags.
The total value of the August harvest dropped by 18.1% year on year to 1.67 trillion COP ($534mn), down from 2.04 trillion COP in August 2025. On a 12-month trailing basis, harvest value totaled 20.88 trillion COP, down 11.8pc year on year, but extending a 18-month consecutive run above the 20 trillion COP threshold.
Composite indicative prices hold steady
The ICO composite indicative price averaged 287.29¢/lb in August, virtually unchanged from July (-0.03pc) and down 3.3pc compared with August 2025, representing the second-highest August average on record.
Source : FNC
By Diana Delgado
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