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On Monday, September arabica coffee (KCU25) closed up 4.35 cents (+1.53%), while September ICE robusta coffee (RMU25) rose 91 cents (+2.73%). This price increase comes amid below-average rainfall in Brazil’s Minas Gerais, reported at only 2.7 mm during the week ending August 2, which is 31% of the historical average. Brazilian real strength further supported coffee prices, climbing to a 3.5-week high against the dollar, which discourages export sales.
ICE arabica coffee inventories fell to a 5.5-month low of 760,529 bags, contributing to the rise in arabica prices. In contrast, ICE robusta inventories increased to a one-year high of 7,029 lots. Brazil’s total green coffee exports dropped by 31% year-on-year in June, further influencing market dynamics, while projections for Brazil’s coffee production in the 2025/26 marketing year anticipate an increase to 65 million bags.
Significantly, the USDA forecasts indicate a global arabica coffee deficit of 8.5 million bags for 2025/26, the widest in five years, juxtaposed against a projected record global coffee production of 178.68 million bags. The market remains sensitive to the ongoing Brazilian harvest, now reported at 90% complete as of July 30, with 98% of robusta and 85% of arabica crops harvested.
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