Daily Coffee Report 7/28/26
Daily coffee report
StoneX Coffee Team
- Coffee
Colombia Coffee Outlook: Production, Contract, and Challenges
By: Diana Delgado, Contractor
Colombia Coffee Outlook: Production, Contracts, and Challenges
Coffee Network (Bogota) -Colombia, the world’s third-largest coffee producer, is expected to produce between 12.2 million to as much as 12.5 million 60-kg bags in the calendar year. This is down from 13.9 million last year, but output is projected to recover next year, propelled by water stress prompted by the El Niño weather phenomenon and the biannual cycle, according to the General Manager of the National Federation of Coffee Growers (FNC), Germán Bahamón.
“An El Niño phenomenon is coming; what it does is cause water stress in the plant, which prepares an improved harvest for 2027," Bahamón said today.
Extension of Contract
The Colombian government and the FNC have agreed to sign a temporary extension to the National Coffee Fund (FoNC) contract this week. The extension will give both parties up to five months to negotiate and structure a new long-term contract.
The extension comes at a vital time to provide relief to coffee growers, Bahamón noted. The Federation seeks to renew the contract for another 10 years, as the incumbent contract is expected to end on July 7.
The Power of the Purchase Guarantee
A prestigious study by the Universidad de los Andes demonstrated through microeconometric data that the 'Purchase Guarantee' (Garantía de Compra), financed through FoNC funds, is fundamental for the ecosystem. In the coffee sector, this mechanism secures producers' income; without it, they would receive 20.8% less for their coffee load.
“It is the only product with a purchase guarantee, protecting the coffee grower from a market of many sellers and few buyers. The Federation, through this system, disciplines the market so that no one oppresses the coffee grower. It purchases 21% of the coffee, which disciplines the market,” Bahamón noted.
"Umbral": The New Frontier of Colombian Coffee
Bahamón reiterated that the National Coffee Research Center (Cenicafé) will launch a new variety in 2027, which has been rigorously tested for the past 30 years. The new variety, named “Umbral”, can be planted at altitudes of 900 meters and higher, significantly expanding the nation's coffee frontier.
Colombia could produce 20 million 60-kg bags in the medium term. This ambitious goal will be possible partly thanks to the development of this new variety, which is resistant to warmer lowlands and highly resilient to pests.
Coffee in Conflict Areas & Crop Substitution
According to the United Nations, Colombia ended 2024 with 264,000 hectares planted with coca. The FNC believes the country could ensure that illegal growers in heavily affected departments like Cauca, Nariño, and Putumayo successfully switch to coffee and cocoa.
However, Bahamón warned that the strategy must be comprehensive:
"It's not just about handing over a seed or a coffee seedling (chapola) to those in illicit crops, telling them to switch to cocoa and coffee, and financing them so they can survive for 3 to 5 years."
To make the transition permanent, the government must actively support and sustain those growers during that 3-to-5-year gap while the crops mature.
The New Threat
Bahamón concluded with a stark warning about security in the countryside, stating that extortion has become the "new Roya" (coffee rust disease) in coffee-growing departments. He emphasized that the only way to ensure young growers return to the farms is by putting an end to extortion.
By Diana Delgado
Source. German Bahamon, general manager of FNC
- Coffee
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Perspective: Morning Commentary for July 28
July 28 – Stock futures were mixed to firmer overnight, as relative calm continues in the Middle East and as the Federal Open Market Committee begins two days of monetary policy discussion. The VIX is trading near 19, while the dollar index trades near 101.5. Yields on 10-year Treasuries are trading near 4.63%, while yields on 2-year Treasuries are trading near 4.30%. WTI crude oil is trading near $81 per barrel after actually probing below $80 earlier in the session, while Brent trades near $87 per barrel. The grain and oilseed sector tried to bounce in the overnight session following yesterday’s active selloff, but it quickly succumbed to additional selling pressure as crude oil added to its losses, with the exception of corn that held modest gains based on tumbling crop ratings.
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Daily Coffee Report 7/27/26
Daily coffee report
StoneX Coffee Team
- Coffee
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