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On Monday, December arabica coffee (KCZ25) closed down $5.85 (-1.55%) and November ICE robusta coffee (RMX25) fell $15 (-0.36%). This decline follows reports of above-average rainfall in Brazil, which is projected to enhance crop conditions and boost coffee yields. Minas Gerais, Brazil’s largest arabica coffee-producing area, received 25.9 mm of rain during the week ending September 27, amounting to 104% of the historical average, during the critical flowering period for coffee trees.
ICE-monitored arabica inventories dropped to a 1.5-year low of 571,754 bags, while robusta inventories fell to a 2-month low of 6,464 lots on September 19. Additionally, Brazil’s July unroasted coffee exports fell by 20.4% year-over-year to 161,000 metric tons, and coffee shipments from January to July decreased by 21% to 22.2 million bags. The USDA projects global coffee production for 2025/26 will reach a record 178.68 million bags, with Brazil’s production forecast to be 65 million bags.
Despite high expectations for robusta coffee production in Vietnam, which is estimated to climb by 6% to 29.4 million bags, market pressures from Brazil’s nearing harvest completion—reported at 98.9% as of September 12—are weighing on coffee prices.
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