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On Friday, December arabica coffee (KCZ25) closed up by +6.70 (+1.80%) while November ICE robusta coffee (RMX25) rose by +107 (+2.61%). This increase was driven by tighter inventories at the ICE coffee exchange, where arabica stocks fell to a 1.5-year low of 576,753 bags and robusta inventories dropped to a 1.75-month low of 6,464 lots. The situation has been exacerbated by a 50% tariff on US imports from Brazil, which has significantly tightened US supplies since roughly a third of America’s unroasted coffee is sourced from Brazil.
In related developments, coffee prices previously rose due to low rainfall in Brazil’s coffee-growing regions leading up to the critical flowering period for the crop. Brazil’s Conab reduced its forecast for the 2025 arabica coffee crop by 4.9%, estimating production at 35.2 million bags. With global July coffee exports down 1.6% year-over-year to 11.6 million bags, and Brazilian July unroasted coffee exports falling 20.4% year-over-year, reduced supplies are expected to support higher prices.
However, pressures remain as Brazil’s Cooxupe coffee co-op reported a nearly complete 98.9% harvest completion as of September 12. On the production front, the USDA expects world coffee production in 2025/26 to rise by 2.5% year-over-year to a record 178.68 million bags, with a projected arabica deficit of 8.5 million bags, further complicating the market dynamics.
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