KC SPECIALIST · Softs / Cost Regime
Z1129 – [KC] BLS Import Price Deviation Regime Signal
BLS Import Price Index deviation from long trend as a cost-push versus cost-deflation regime signal for Arabica.
At a glance
Current reading
-0.644
Signal state
Cost-Deflation Regime
340 days in Stress phase
Updated
Nov 04, 2026
Monthly BLS IPI release
Sample
36-year window
Monthly cadence; 1990-12 onward
As of Nov 04, 2026. Updated nightly.
SIGNAL OVERVIEW
The BLS Import Price Index for the Green Coffee plus Cocoa plus Sugar basket (series IR000) captures wholesale cost regimes across the soft commodities complex. Where the Z6530 sibling measures year-over-year change in the basket, this signal measures deviation from a longer-term trend, separating cost-push regimes from cost-deflation regimes. Sustained positive deviation signals a cost-push regime with bullish Arabica setup; sustained negative deviation signals a cost-deflation regime with bearish Arabica. Daily Spearman IC against Arabica forward 60-day returns is plus 0.167 at p-value 4e-57 across 8,947 observations; Phase +1 cost-push firings deliver a plus 3.62 pp edge above baseline and Phase -1 cost-deflation firings deliver minus 4.10 pp. 7.72 pp directional spread, one of the widest in the KC signal library. Full regime stats and historical case episodes below.
LIVE CHART
KC BLS Import Price Deviation Regime Signal
What the chart is showing right now. The dark line is BLS Import Price Index deviation from longer-term trend for the Green Coffee plus Cocoa plus Sugar basket, bounded to plus or minus one. Positive composite means import prices are running above longer-term trend (cost-push regime, bullish Arabica). The bronze line in the middle panel is ICE US Coffee C first-nearby. The bottom panel tracks the trailing 252-day Spearman information coefficient between the composite and Arabica forward 60-day returns.
COMPOSITE
-0.644 / tanh
STATE
Cost-Deflation Regime
PHASE
-0.76
DAILY IC
+0.167 (p = 4e-57)
PHASE SPREAD
7.72 pp
TODAY’S PLAYBOOK READING
STATE
Moderate Cost Deflation
STATE AND HISTORY
Cost-Deflation Regime firing at composite -0.644, 340 trading days running in the STRESS phase. Phase +1 (Cost-Push Regime) delivers plus 5.94 percent fwd60d / plus 3.62 pp above plus 2.32 pct baseline across 4,325 days. Phase -1 (Cost-Deflation) delivers minus 1.78 percent fwd60d / minus 4.10 pp below baseline across 3,664 days. Daily IC plus 0.167 at p = 4e-57. Non-overlap rho plus 0.156 at p = 0.057 across 150 samples; near-significant at 5 pct.
THE COST-REGIME MECHANISM
BLS Import Price Index end-use series IR000 (Green Coffee plus Cocoa plus Sugar) captures wholesale cost regimes across soft commodities complex. Deviation from longer-term trend separates cost-push regimes (above-trend costs, bullish Arabica) from cost-deflation regimes (below-trend costs, bearish Arabica). Captures regime-level macro cost dynamics distinct from short-term price moves.
HOW TO POSITION
Macro regime-level supply-cost read on Arabica with multi-quarter persistence. Cost-Push firings historically coincide with Arabica supercycles (2010-11, 2014-15, 2021-22, 2024). Cost-Deflation firings coincide with cross-soft loose regimes. Pair with ENSO (long-lead directional), cross-soft basket YoY (sibling cadence), Cecafe realized-price (short-lead transaction confirmation).
WHAT THE CHART SHOWS
The composite sits at -0.644 in the Cost-Deflation Regime band. BLS Import Price Index has run below its longer-term trend through 2026. The current STRESS episode began July 2025 and has run 340 trading days.
TOP INPUTS FIRING
- Primary composite -0.644 State Cost-Deflation Regime, 340 days running in STRESS phase.
- BLS IR000 below longer-term trend BLS Import Price Index End-Use IR000 (Green Coffee plus Cocoa plus Sugar) has run below its longer- term trend through 2026; composite deep in Phase -1 territory.
- Non-overlap near-significant (honest caveat) Non-overlap IC at 60-day sampling delivers rho plus 0.156 with p-value 0.057 across 150 samples; near-significant at 5 pct and sign-consistent with daily IC plus 0.167.
THE TAKEAWAY
What this means for you today
THE COST-REGIME CALL
Composite -0.644, Cost-Deflation Regime. BLS Import Price Index has run below its longer-term trend through 2026. Signal firing in the Cost-Deflation bucket for 340 days; forward 60-day edge in Phase -1 historically runs minus 4.10 pp below baseline.
THE EMPIRICAL CONTEXT
Phase pattern is strongly monotone. Phase +1 (Cost-Push) delivers plus 3.62 pp above baseline; Phase 0 (Costs Near Norm) delivers minus 0.88 pp; Phase -1 (Cost-Deflation) delivers minus 4.10 pp. 7.72 pp directional spread between Phase +1 and Phase -1, one of the widest cost-regime patterns in the softs library.
THE HONEST CAVEAT
Non-overlap test at 60-day sampling delivers rho plus 0.156 with p-value 0.057 across 150 samples; near-significant at 5 pct, sign-consistent with daily IC. Multi-quarter persistence in regimes means short-horizon forecasting is noisier than the daily IC implies. Sibling to Z6530 (same BLS IR000 data, YoY-change framing instead of deviation-regime framing).
THE REGIME MAP
The three phases, forward returns and sample share
Computed from 9,007 post-warmup trading days (1990-12-03 onward). Baseline Arabica fwd60d: mean plus 2.32 percent (median minus 0.96 percent). Phase +1 (Cost-Push) delivers +3.62 pp edge; Phase 0 delivers -0.88 pp; Phase -1 (Cost-Deflation) delivers -4.10 pp. Non-overlap IC near-significant at p=0.057 (every- 60d sampling, n = 150).
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Cost-Push Regime | +1 | 48.0% (4325 d) | +5.94% | +3.62pp | 2024, 2021-22, 2014-15 | |
| Costs Near Norm | 0 | 11.3% (1018 d) | +1.44% | -0.88pp | 2017, 2013, 2007 | |
| Cost-Deflation Regime TODAY | -1 | 40.7% (3664 d) | -1.78% | -4.10pp | 2026 (current), 2019, 2016 |
The historical pattern
Signature episodes in the 36-year sample
What this measures
Deviation of the BLS Import Price Index End-Use series IR000 (Green Coffee plus Cocoa plus Sugar) from its longer-term trend, with z-score standardization and tanh bounding. Positive composite equals above-trend cost regime (cost-push); negative composite equals below-trend (cost-deflation).
Why it matters
Why BLS Import Price deviation reads Arabica cost regime
The BLS Import Price Index end-use series IR000 (Green Coffee plus Cocoa plus Sugar) tracks wholesale import costs across the soft commodities complex. Deviation from longer-term trend separates cost-push regimes (above-trend costs, often driven by EM-demand surges, dollar weakness, or supply shocks) from cost-deflation regimes (below-trend costs, often driven by EM-demand slowdowns, dollar strength, or excess supply). Multi-quarter persistence in these regimes makes this a durable macro cost lens.
How to use this signal today
Macro regime-level supply-cost read on Arabica with multi-quarter persistence. Cost-Push firings historically coincide with Arabica supercycles. Cost-Deflation firings coincide with cross-soft loose regimes. Pair with ENSO (long-lead ocean forcing), the cross-soft basket YoY signal (sibling with YoY framing instead of deviation framing), Cecafe realized-price (short-lead transaction confirmation), and ICE positioning for stacked conviction.
Risk overlay
Validation rests on daily Spearman IC plus 0.167 (p-value 4e-57, N = 8,947), extremely significant. Non-overlap test at 60-day sampling plus 0.156 at p-value 0.057, near-significant at 5 pct. 7.72 pp directional spread. Primary risks are (a) multi-quarter regime persistence means short-horizon forecasting is noisier, (b) BLS IPI revisions can be meaningful, and (c) sibling to Z6530 (same underlying data) means readers should use one framing primarily and the other as cross-check.
GO DEEPER
Want the full depth?
The research brief walks through the BLS Import Price Index deviation methodology, enumerates the 2010-2011 EM supercycle and the 2014-2015 Brazil drought cost-push anchors, and explains how to pair the deviation-regime framing with the YoY-change framing of the sibling cross-soft basket signal.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 05, 2026 07:00 PM ET