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December arabica coffee (KCZ25) rose by +6.70 (+1.80%) and November ICE robusta coffee (RMX25) increased by +70 (+1.67%) due to tighter inventories and crop concerns. As of September 18, ICE arabica inventories reached a 1.5-year low of 571,754 bags, while robusta inventories hit a 2-month low of 6,464 lots. The U.S. imposed a 50% tariff on Brazilian coffee imports, prompting American buyers to avoid new contracts, further tightening U.S. supplies, as one-third of unroasted coffee in the U.S. comes from Brazil.
Vietnam’s coffee production is expected to rise by 6% year-over-year to 1.76 million metric tons (29.4 million bags) for the 2025/26 season, aided by recent rainfall improving crop conditions. Concerns remain about the impact of Typhoon Bualoi on coffee farms in Vietnam, as heavy rains have flooded some areas. Additionally, Brazil’s national crop forecasting agency decreased its 2025 arabica coffee production estimate by 4.9% to 35.2 million bags, contributing to overall bullish factors for coffee prices.
Globally, the USDA projected a record coffee production of 178.68 million bags for 2025/26, despite a decrease in arabica output. Brazil’s production is expected to reach 65 million bags, while Vietnam’s is anticipated to align with a four-year high of 31 million bags. However, Volcafe warns of a potential arabica coffee deficit of 8.5 million bags for the same period, marking the fifth consecutive year of deficits.
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