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On December 20, arabica coffee prices increased by 11.05 cents (+3.03%) to reach a 3.5-month high, while September ICE robusta coffee rose by 74 cents (+1.56%), coinciding with a 3-week rally largely driven by weather concerns in Brazil. Recent reports indicate that Brazil’s Minas Gerais, the largest arabica coffee-growing area, recorded no rainfall in the week ending August 16, coupled with frost damage impacting the coffee crop.
Brazil’s Trade Ministry reported a 20.4% year-over-year decline in July unroasted coffee exports, totaling 161,000 metric tons. In July, green coffee exports also fell by 28% year-over-year to 2.4 million bags. Tighter US coffee supplies, exacerbated by tariffs on Brazilian exports, are further influencing prices, as approximately one-third of unroasted coffee in the US is sourced from Brazil.
Additionally, ICE arabica coffee inventories dropped to a 1.25-year low of 726,661 bags, slightly recovering to 729,829 bags. Meanwhile, Vietnam’s coffee output for the 2023/24 crop year is projected to decrease by 20% year-over-year to 1.472 million metric tons due to drought conditions. The USDA forecasts a 2025/26 global coffee production increase of 2.5% year-over-year, although there is a projected Arabica deficit of 8.5 million bags.
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