Daily Coffee Report 11/6/26
Daily coffee report
StoneX Coffee Team
- Coffee
Falling Oil Prices Offer Limited Relief as Coffee Shipping Costs Remain Elevated
Alexis Rubinstein
Managing Editor - Coffee Network
CoffeeNetwork (New York) - Lower energy prices provided a rare piece of positive news for commodity supply chains this week, but the coffee sector is unlikely to see immediate cost relief as container freight rates remain historically high despite showing signs of softening.
Crude oil prices moved lower on Tuesday, with WTI Crude Oil falling to around $88 per barrel and Brent Crude Oil trading near $98 per barrel. The decline comes after months of elevated energy costs driven by geopolitical tensions and supply concerns.
For the coffee trade, lower fuel prices are generally positive because they influence transportation, warehousing, roasting, and distribution costs. However, shipping expenses continue to be driven more by vessel capacity management, trade flows, and geopolitical disruptions than by fuel costs alone.
According to Drewry, its benchmark World Container Index fell 1% to $4,434 per 40-foot container on Oct. 1, marking a second consecutive weekly decline. Even so, the index remains roughly 166% above year-ago levels, underscoring how expensive ocean freight remains compared with historical norms.
Key trade routes continue to show elevated rates. Shipping a container from Shanghai to New York costs about $10,428, while Shanghai-to-Los Angeles rates remain near $7,835 per container. Rates to Europe have eased more noticeably, with Shanghai-to-Rotterdam at $3,399 and Shanghai-to-Genoa at $3,702.
Meanwhile, the Freightos Baltic Index, another widely followed benchmark, stood near $3,343 per container in early October, reflecting a slight week-over-week decline but still elevated freight costs globally.
Analysts at Xeneta said container rates appear to have peaked following disruptions associated with the Strait of Hormuz crisis, but they do not expect a sharp collapse in prices. Spot rates from Asia to the U.S. West Coast remain above $8,300 per FEU, while rates to the U.S. East Coast exceed $11,500 per FEU.
For coffee exporters in Brazil, Vietnam, and other producing countries, the result is a mixed picture. Lower oil prices could eventually reduce some transportation and operating expenses, but freight markets remain constrained by factors that have little to do with energy costs. Carrier capacity controls, geopolitical uncertainty, and shifting trade patterns continue to support shipping rates.
The development comes as arabica futures continue to recover. Coffee prices climbed back above 300 cents per pound this week as the market focused on quality concerns in Brazil, tight certified stocks, and uncertainty surrounding future crop development.
For the coffee industry, the more significant takeaway may be that logistics inflation is beginning to moderate without fully normalizing. Energy markets are cooling and freight rates are no longer rising aggressively, but the cost of moving coffee around the world remains well above pre-crisis levels. Until container rates retreat more substantially, exporters, importers, and roasters are likely to see only limited relief from falling oil prices.
Alexis Rubinstein
- Coffee
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