On Friday, September arabica coffee (KCU25) closed up 4.64% at +15.15, while September ICE robusta coffee (RMU25) rose 2.86%, gaining +117. This week, arabica prices have rallied by 10.4%, and robusta has risen by 18%. Contributing factors include a frost event in Brazil that highlighted risks during the winter season, reduced coffee exports, and declining ICE warehouse inventories.
Brazil’s July unroasted coffee exports fell 20.4% year-over-year to 161,000 metric tons, with green coffee exports dropping 28% to 2.4 million bags. ICE-monitored arabica coffee inventories have decreased to a 1.25-year low of 726,661 bags, while robusta inventories reached a three-week low. Despite bullish trends, concerns remain about U.S. tariff policies on Brazilian coffee exports, which could adversely affect sales.
Furthermore, Vietnam’s coffee production for the 2023/24 crop year is projected to decrease by 20% year-over-year to 1.472 million metric tons, its smallest crop in four years. The USDA forecasts global coffee production will rise by 2.5% to a record of 178.68 million bags for the 2025/26 season, but a deficit of 8.5 million bags in arabica coffee is projected.
