On Tuesday, September arabica coffee (KCU25) closed down -5.55 (-1.73%) and September ICE robusta coffee (RMU25) down -1 (-0.03%). This decline followed a period of long liquidation after prices had rallied to a 1.75-month high, spurred by Brazil’s July unroasted coffee exports dropping -20.4% year-over-year to 161,000 metric tons.
ICE coffee inventories also fell, with arabica dropping to a 14.75-month low of 737,526 bags, while robusta reached a 2-week low of 6,976 lots. Brazil’s overall 2025/26 coffee harvest is 94% complete as of August 6, surpassing last year’s 92% completion. Furthermore, the USDA projects a global coffee production increase of +2.5% year-on-year to a record 178.68 million bags for the 2025/26 marketing year, with deficits of arabica coffee widening to -8.5 million bags.
Concerns linger regarding U.S. tariff policies, as President Trump has not exempted coffee from a 50% tariff on Brazilian exports, which could negatively impact sales. Additionally, weather conditions have improved, easing drought concerns, with Brazil’s Minas Gerais area receiving 4.8mm of rain, 109% of the historical average.
