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As of today’s trading, December arabica coffee (KCZ25) is up +0.75 (+0.20%), while November ICE robusta coffee (RMX25) has fallen -134 (-3.18%), reaching a six-week low.
The decline in robusta prices is attributed to favorable weather forecasts for Vietnam, easing concerns over potential crop damages from Typhoon Ragasa. Conversely, tight ICE coffee inventories, with arabica inventories at a 17.5-month low of 601,717 bags and robusta at a 1.75-month low of 6,464 lots, continue to support prices. Furthermore, the 50% tariffs on US imports from Brazil have contributed to a sharp drawdown in ICE coffee inventories, exacerbating supply issues.
In related market dynamics, Brazil’s coffee production is forecasted for a slight increase to 65 million bags for the 2025/26 season, while robusta production in Vietnam is expected to rise by 6% year-over-year to 1.76 million metric tons (29.4 million bags), marking a four-year high. Globally, coffee production is projected to increase by 2.5% in the same period, despite a decrease in arabica production.
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