December arabica coffee (KCZ25) on Thursday closed up +5.20 (+1.38%), and November ICE robusta coffee (RMX25) closed down -3 (-0.07%).
Coffee prices settled mixed on Thursday, with robusta sliding to a 1-week low. Forecasts for showers next week in Brazil's coffee-growing regions are weighing on coffee prices. However, arabica prices moved higher Thursday as strength in the Brazilian real (^USDBRL) sparked short covering in arabica futures. The real rallied to a 15-month high against the dollar on Thursday, discouraging export sales from Brazil's coffee producers.
The 50% tariffs imposed on Brazilian imports into the US have led to a sharp drawdown in ICE coffee inventories, a bullish factor for coffee prices. ICE-monitored arabica inventories fell to a 16.5-month low of 658,302 bags on Thursday. ICE robusta coffee inventories fell to a 1.75-month low Thursday at 6,517 lots. American buyers are voiding new contracts for purchases of Brazilian coffee beans due to the 50% tariffs imposed on US imports from Brazil, thereby tightening US supplies, as about a third of America's unroasted coffee comes from Brazil.
On Tuesday, Dec arabica posted a contract high and nearest-futures (U25) arabica posted a 7-month high, while robusta climbed to a 3-week high. Coffee prices rose due to a lack of rain in Brazil's coffee-growing regions ahead of the critical flowering period for coffee trees. Somar Meteorologia reported Monday that Brazil's largest arabica coffee-growing area, Minas Gerais, received no rain during the week ended September 13.
Coffee prices also garnered support Tuesday after the National Oceanic and Atmospheric Administration put the chance of a La Niña weather system in the southern hemisphere from October to December at 71%, which could bring excessive dry weather to Brazil and hurt the 2026/27 coffee crop. Brazil is the world's largest arabica coffee producer.
Coffee prices found support after Conab, Brazil's crop forecasting agency, cut its Brazil 2025 arabica coffee crop estimate on September 4 by -4.9% to 35.2 million bags from a May forecast of 37.0 million bags. Conab also cut its total Brazil 2025 coffee production estimate by -0.9% to 55.2 million bags from a May estimate of 55.7 million bags.
News of reduced coffee exports is supportive for prices after the International Coffee Organization (ICO) on September 3 reported that global July coffee exports fell -1.6% y/y to 11.6 million bags, and cumulative Oct-Jul coffee exports fell -0.3% y/y at 115.615 million bags.
Reduced exports from Brazil are supporting prices. On August 6, Brazil's Trade Ministry reported that Brazil's July unroasted coffee exports fell -20.4% y/y to 161,000 MT. In related bullish news, exporter group Cecafe reported that Brazil's green coffee exports in July fell -28% y/y to 2.4 million bags. Cecafe reports that July arabica exports fell -21% y/y, while robusta exports plunged -49% y/y. Cecafe said Brazil's July coffee exports fell -28% to 2.7 million bags, and that coffee shipments during Jan-July fell -21% to 22.2 million bags.
Harvest pressures in Brazil are bearish for coffee prices after Brazil's Cooxupe coffee co-op announced Wednesday that the harvest among its members was 98.9% complete as of September 12. Cooxupe is Brazil's largest coffee cooperative and Brazil's largest exporter group.
Due to drought, Vietnam's coffee production in the 2023/24 crop year decreased by -20% y/y to 1.472 MMT, the smallest crop in four years. Also, Vietnam's General Statistics Office reported that 2024 Vietnam coffee exports fell by -17.1% y/y to 1.35 MMT. Additionally, the Vietnam Coffee and Cocoa Association reduced its 2024/25 Vietnam coffee production estimate to 26.5 million bags on March 12, down from a December estimate of 28 million bags. However, the Vietnam National Statistics Office reported last Monday that Vietnam's Jan-Aug 2025 coffee exports were up +7.8% y/y to 1.141 MMT.
The USDA's Foreign Agriculture Service (FAS) projected on June 25 that world coffee production in 2025/26 will increase by +2.5% y/y to a record 178.68 million bags, with a -1.7% decrease in arabica production to 97.022 million bags and a +7.9% increase in robusta production to 81.658 million bags. FAS forecasted that Brazil's 2025/26 coffee production will increase by +0.5% y/y to 65 million bags and that Vietnam's 2025/26 coffee output will rise by 6.9% y/y to a 4-year high of 31 million bags. FAS forecasts that 2025/26 ending stocks will climb by +4.9% to 22.819 million bags from 21.752 million bags in 2024/25. However, Volcafe is projecting a global 2025/26 arabica coffee deficit of -8.5 million bags, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive year of deficits.
