December arabica coffee (KCZ25) today is up +5.50 (+1.48%), and November ICE robusta coffee (RMX25) is up +83 (+2.03%).
Coffee prices today are sharply higher. Tight coffee inventories are supporting coffee prices. The 50% tariffs imposed on US imports from Brazil have led to a sharp drawdown in ICE coffee inventories, a bullish factor for coffee prices. ICE-monitored arabica inventories fell to a 1.5-year low of 579,961 bags on Thursday. ICE robusta coffee inventories fell to a 1.75-month low of 6,464 lots last Friday. 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, arabica coffee prices fell to a 1-month low as rain in Brazil eased dry conditions. Brazil's Somar Meteorologia stated that rainfall in Minas Gerais will persist for the remainder of the week.
Last Tuesday, Dec arabica coffee 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 on Monday that Brazil's largest arabica coffee-growing area, Minas Gerais, received 10.5 mm of rain during the week ended September 20, only 73% of the historical average. The month of September is the critical flowering period for Brazil's coffee trees.
Coffee prices also garnered support last Tuesday after the National Oceanic and Atmospheric Administration (NOAA) increased the likelihood of a La Niña weather system in the southern hemisphere from October to December to 71%, which could bring excessive dry weather to Brazil and harm the 2026/27 coffee crop. Brazil is the world's largest producer of arabica coffee.
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 reduced its total Brazil 2025 coffee production estimate by 0.9% to 55.2 million bags, from a May estimate of 55.7 million bags.
In a bullish factor, the International Coffee Organization (ICO) reported on September 3 that global July coffee exports declined -1.6% year-over-year (y/y) to 11.6 million bags, and cumulative October-July coffee exports fell -0.3% y/y to 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 reported 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.
A bumper robusta coffee crop in Vietnam is bearish for prices. Vietnam's 2025/26 coffee production is expected to climb +6% y/y to 1.76 MMT, or 29.4 million bags, a 4-year high. Also, the Vietnam National Statistics Office reported September 8 that Vietnam's Jan-Aug 2025 coffee exports were up +7.8% y/y to 1.141 MMT. Vietnam is the world's largest producer of robusta coffee.
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.
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.
