Is ‘Perception’ the New ‘Reality’ in Coffee Markets?

CERN’s Large Hadron Collider runs underground near Geneva, where I’ve spent a lot of time analyzing data that describes coffee’s supply and demand reality. In the quantum world explored by CERN, reality (believe it or not) is ambiguous prior to observation. But once the data are in, the data are in, and perception takes an unassailable back seat to fact.  

Here on the surface, of course, things don’t always work that way. These days, especially, everything is subject to interpretation, the perception of the crowd riding higher and further than it should.  

This phenomenon has become a prominent theme in coffee trading as well. For example (and in the absence of a Large Hadron Collider for coffee), here’s a quick thought experiment. Consider two supply and demand scenarios: 

Q4 is just beginning; destination stocks are at 16m x 60kg bags globally; NY exchange certified stocks sit at 420k x 60kg bags; Brazilian flowering mixed, air temperatures record high; new crop production average estimates around 175m x 60kg bags vs similar volume of demand. 

Q4 is just beginning; destination stocks are at 18m x 60kg bags globally; NY exchange certified stocks sit at 570k x 60kg bags; Brazilian flowering underway, forecasts wet, air temperatures moderate; new crop production average estimates above 185m bags x 60kg bags vs demand below 180m. 

In reality, the first scenario describes an objectively tighter environment, one that should be volatile and premiumizing nearby supply while also pricing in forward shortage. The second, while still on the lower end of historic stock levels, should at least be a relatively calmer situation trending towards lower prices and greater stability. 

However, at the beginning of October 2023, the moment-in-time described in the first scenario, the industry perception was quite calm. We’d gotten through the pandemic and supply chain bottlenecks, and inflation was rapidly decelerating. The SCTA dinner that month felt like a sigh of relief. NY futures were trading below 150 and the z3/h4 spread was in a small carry at -2.00, both nearly unfathomable today.  

In an objectively looser moment, 2025’s reality described in scenario two, the perception is very different. NY futures began this month above 385 and z5/h6 sat at +15.85 (now +20.35 as I type this!). Daily volatility is off the charts and the light at the end of the tunnel, according to several views shared at the SCTA dinner, looks more like an oncoming train.  

What gives? 

Reality is driven by data; perception by headlines, loud voices and fear. Efforts to promote a sense of scarcity – such as well-advertised NY decertifications, exaggeratedly low production estimates and/or outright disinformation (see: rain in Brazil) – can drown out the facts for a while. An overarching sense of geopolitical uncertainty doesn’t help, but in almost all other markets, except for safe-haven gold, that has meant price collapse, not all-time highs. 

Of course, subprime perception can’t run from reality forever. By the start of 2024, NY certs had dwindled to 251k bags and El Niño heat and dryness were clearly wrecking production potential: the new crop looked dire. Perception shifted, and the market rallied without looking back. 

How will the data look at the outset of 2026? Will today’s perception of scarcity and urgency emerge into a different reality, or is that light at the end of the tunnel, indeed, yet another bullish freight train? That’s, of course, to be observed. 

But what’s clear today is that for any complex phenomena – from geopolitics to coffee futures markets – we must build expectations based less on what’s objectively accurate and more on what’s perceived to be so. In a live-feed world where informational advantages are razor thin, the new advantage becomes interpretation, manipulation and the molding of perception.  

And we thought particle physics was complex! 

^{Jordan Hooper began his coffee career at the end of a two-year volunteer stint in Nicaragua. He’s always worked in the trade, starting in the cupping lab of a specialty importer prior to experience trading and managing both commercial and specialty trading businesses. Jordan joined Sucafina in 2016 as Managing Director of Sucafina Americas and transitioned into his new role as Head of Green Coffee Trading in January 2024.}