On Wednesday, September arabica coffee (KCU25) rose by 1.69% to close at +5.00, while September ICE robusta coffee (RMU25) increased by 0.33%, adding +11. Prices were bolstered by frost risks in Brazil as meteorologists warned of a cold front that could damage crops. Current ICE-monitored arabica coffee inventories have fallen to a 3-month low of 806,062 bags, while robusta inventories are at an 11.75-month high of 6,410 lots.
Brazil’s coffee harvest is reportedly 77% complete as of July 16, exceeding last year’s pace of 74%, with robusta harvests at 93% and arabica at 67%. Meanwhile, Brazil’s Cooxupe coffee co-op indicated a 59% completion rate as of July 18. Funds have increased net-short positions in robusta futures to the highest levels in two years, exacerbating potential for short-covering rallies. Additionally, Brazil’s June green coffee exports dropped 31% year-on-year to 2.3 million bags.
Concerns over supply disruptions have arisen following President Trump’s announcement of potential 50% tariffs on U.S. imports from Brazil, effective August 1. The USDA projects a world coffee production increase of 2.5% for the 2025/26 marketing year, with arabica deficits expected to widen to 8.5 million bags, marking the fifth consecutive year of deficits.
