Tag: Arabica

Global Coffee Market Finds Balance as Prices Stabilize and Trade Shifts Eastward

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October 2025 ICO Report Reveals Steady Prices, Regional Export Rebalancing, and Signs of Market Surplus

Dubai – Qahwa World

After months of price turbulence driven by weather extremes, logistics disruptions, and policy shifts, the global coffee market entered October 2025 in a rare state of equilibrium. According to the latest Coffee Market Report issued by the International Coffee Organization (ICO), the ICO Composite Indicator Price (I-CIP) averaged 326.38 US cents per pound, a modest 0.5% increase over September—marking a month of sideways stability in an otherwise volatile year.

The data reflects a market adjusting to both rising production in key origins and softening consumption growth across major economies. Yet behind this stability lies a quiet reshaping of global trade flows, as Asia and Africa consolidate export strength while South America experiences cyclical slowdown.

A Month of Stability Amid Global Uncertainty

The October 2025 I-CIP fluctuated between 314.68 and 344.77 US cents/lb, posting a median of 325.52 US cents/lb. Although stable, prices remain 30% higher than a year earlier, underscoring the persistent cost pressures that continue to define the post-pandemic coffee economy.

Price movements among coffee groups showed a clear divide. Colombian Milds slipped marginally (−0.1%) to 403.25 US cents/lb, while Other Milds gained 0.9% to 403.79 US cents/lb. Brazilian Naturals fell slightly to 373.47 US cents/lb, and Robustas, in contrast, expanded 2.0% to 215.06 US cents/lb — a sign of ongoing resilience in lower-grade coffee demand, especially for soluble and instant formats.

The differential between Colombian Milds and Other Milds narrowed into negative territory (−0.54 US cents/lb), highlighting how recent weather disruptions in Central America temporarily compressed quality spreads. Meanwhile, arbitrage between London and New York futures markets contracted by 2.9% to 163.84 US cents/lb, signaling closer alignment between Arabica and Robusta futures.

Market volatility, however, crept upward. Intra-day volatility of the I-CIP averaged 15.9%, up by more than two percentage points month-on-month — an indication that traders remain reactive to climate events and logistics developments, such as Suez Canal restrictions and persistent container shortages delaying deliveries.

Weather, Tariffs, and Consumption Trends: Forces in Counterbalance

The ICO attributes October’s price stability to a balance between bullish and bearish factors.

On the bullish side, Hurricane Melissa and low rainfall in key Brazilian coffee zones constrained supply, while Typhoon Kalmaegi caused significant crop losses in Vietnam, the Philippines, and Cambodia. The continuation of structural backwardation in futures markets — where near-term contracts are priced higher than future ones — further indicates tight supply for immediate delivery.

At the same time, several bearish influences tempered the market. Among them, signs of slowing consumption in the United States, where rising living costs have eroded discretionary spending. Vehicle repossessions, up 12% year-on-year, highlight a broader financial strain that extends to premium beverage categories. Additionally, a potential reduction in U.S. tariffs on Brazilian coffee — hinted at by Presidents Donald Trump and Luiz Inacio Lula da Silva — has fueled expectations of eased trade tension and lower costs for importers.

The result: prices moved horizontally through the month, neither rallying nor collapsing — a rare moment of equilibrium in a market accustomed to extremes.

Export Flows Reveal a Shifting Coffee Geography

While prices stabilized, trade patterns told a story of transformation. Global green coffee exports reached 9.94 million 60-kg bags in September 2025, down 0.2% year-on-year, marking the sixth consecutive month of negative growth in the 2024/25 coffee year. Total exports across all coffee forms fell by 2.8% to 11.00 million bags.

The Arabica segment showed divergence.

  • Colombian Milds rose by 7.0%, driven by Colombia’s robust output of 14.87 million bags — up 16.5% from the previous year.

  • Other Milds gained 6.1%, with Ethiopia, Mexico, and Nicaragua performing strongly.

  • Brazilian Naturals, however, plunged 21.9% as Brazil entered its “off-year” in the biennial Arabica cycle and faced logistics delays at the port of Santos.

  • Robustas grew 23.0% to 3.67 million bags, powered by Vietnam and Indonesia, whose improved harvests sharply reversed last year’s declines.

These mixed results left the Arabica share of global exports at 63.4%, a marginal drop from 63.7% the previous year — consistent with the long-term average since 2016.

Ethiopia, notably, emerged as a bright spot, expanding exports by 24.4% to 4.91 million bags on the back of an 11% rise in local production and strategic release of stored stocks responding to high international prices.

Regional Divergence: East Rises as South America Contracts

Regional analysis underscores a structural eastward shift in coffee trade:

  • Asia & Oceania: Up 29.3% year-on-year in September and 9.1% for the full coffee year, reaching 44.45 million bags. The surge was led by Vietnam (+7.1%) and Indonesia (+46%), both benefiting from favorable weather and restored yields.

  • Africa: Rose 3.2% in September and 18.6% annually to 19.69 million bags, driven by strong harvests and higher export releases from Ethiopia and Uganda.

  • South America: Fell 13.9% in September and 12.3% across the coffee year to 58.94 million bags, largely due to Brazil’s cyclical downturn and port congestion.

  • Mexico & Central America: Declined 14.6% in September but expanded 7.7% annually to 15.58 million bags, with Mexico and Nicaragua showing resilience.

As a result, South America’s share of global coffee exports slid from 48.4% to 42.5%, while Asia & Oceania’s share climbed to 32.1%, its highest level on record.

This redistribution confirms what many analysts have observed through 2025: a geographic rebalancing of coffee supply chains, with the global center of gravity shifting steadily toward Asia and Africa.

Soluble Coffee Gains Ground

Trade data by form reinforces this transformation. Exports of soluble coffee declined 21.0% in September but rose 5.0% over the full year to 16.72 million bags. This steady annual growth signals a continuing pivot toward value-added coffee formats catering to urban markets and middle-income consumers in producing countries.

By contrast, roasted coffee exports dropped 22.9% year-on-year to 0.68 million bags, reflecting weaker demand for ready-to-drink products in mature economies. Green coffee still dominates global shipments, accounting for 87.5% of total exports.

Global Balance Returns to Surplus

The ICO estimates world production at 177.5 million bags in 2024/25, up 5.2% year-on-year, outpacing consumption, which grew just 1.4% to 175.1 million bags. This modest gap yields a surplus of 2.4 million bags, marking the first positive balance since 2021/22.

The surplus reflects stronger harvests in Asia and Africa, coupled with a stabilization of consumption after the pandemic-era surge. Europe and North America both registered declines in coffee intake (−1.2% and −3.3%, respectively), while consumption in Asia & Oceania rose 7.4%, highlighting a shift in demand patterns alongside production.

A Market at the Crossroads

The October 2025 ICO report captures a market in transition. Prices have steadied, but volatility remains elevated; production is up, yet distribution challenges persist. The eastward drift of coffee trade — reinforced by Indonesia, Vietnam, Ethiopia, and Uganda — may reshape the traditional dominance of Latin American origins in the years ahead.

For producers, this stability offers breathing room after years of disruption. For traders and roasters, it demands agility — balancing sourcing strategies across continents amid ongoing climate and logistical uncertainty.

In short, the coffee world has entered a new phase: from crisis to cautious equilibrium, where resilience and regional diversification define the next chapter of global coffee commerce.

Weather Extremes Drive Coffee Prices to New Highs

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Dubai – Qahwa World

Coffee prices strengthened midweek as extreme weather patterns across major growing regions continued to fuel fears of reduced global supply. Arabica futures for December delivery climbed more than 2%, reaching their highest level in a week and a half, while January Robusta futures also recorded modest gains.

In Brazil — the world’s leading Arabica producer — unusually dry conditions have persisted in Minas Gerais, where rainfall reached only three-quarters of the seasonal average by the end of October. The prolonged dryness follows an even drier previous week and has raised concerns over the next crop’s development. Meanwhile, in Southeast Asia, Typhoon Kalmaegi is expected to make landfall in southern Vietnam, threatening coffee plantations in key Robusta-growing provinces.

Inventories monitored by the Intercontinental Exchange (ICE) continued to shrink, adding upward pressure on prices. Arabica reserves dropped to their lowest point in over a year and a half, while Robusta stocks also declined. The drawdown follows reduced U.S. imports from Brazil, where a 50% tariff has sharply slowed trade. Since Brazil supplies nearly one-third of the unroasted coffee used in the U.S., buyers are now facing tighter availability. However, recent remarks by Presidents Luiz Inácio Lula da Silva and Donald Trump hint at possible progress toward resolving trade tensions, which could influence upcoming market movements.

The U.S. National Oceanic and Atmospheric Administration (NOAA) recently increased the probability of a La Niña event to 71% for the final quarter of 2025. Such conditions often bring hotter and drier weather to Brazil, potentially impacting the 2026/27 harvest if the pattern strengthens.

At the same time, Vietnam — the world’s largest Robusta exporter — continues to expand its output. Official data shows exports rising by more than 10% year-on-year in the first nine months of 2025. The Vietnam Coffee and Cocoa Association expects production for 2025/26 to reach a four-year high if favorable weather persists.

Global trade figures also suggest sufficient overall supply. The International Coffee Organization (ICO) recently reported a slight annual increase in coffee exports, while Brazil’s crop agency, Conab, revised its 2025 Arabica estimate downward due to dry weather.

According to projections from the U.S. Department of Agriculture, world coffee production for 2025/26 could hit a record level of nearly 179 million bags, driven mainly by higher Robusta yields. Arabica output, however, is expected to dip slightly. Ending stocks are projected to rise by almost 5%, suggesting that despite short-term volatility, the market remains well supplied — though increasingly sensitive to shifting weather patterns.

Falling Inventories and Trade Tensions Revive Momentum in Coffee Prices

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Qahwa World – Qahwa World

Coffee prices rose on Wednesday as shrinking ICE inventories and ongoing trade tensions between the United States and Brazil brought renewed momentum to the global coffee market.

December Arabica coffee (KCZ25) closed up +2.80 (+0.72%), while January Robusta coffee (RMF26) finished +145 (+3.25%) higher.

ICE-monitored Arabica inventories fell to a 1.5-year low of 446,475 bags, while Robusta stocks dropped to a 3.25-month low of 6,111 lots. This sharp decline follows the 50% tariffs imposed by the United States on imports of Brazilian coffee, prompting many American buyers to cancel new contracts. Brazil typically supplies about one-third of the U.S. unroasted coffee, tightening domestic supply.

Earlier this week, forecasts of rain in Brazil temporarily pressured prices. Meteorological agency Somar Meteorologia reported that Minas Gerais—the country’s largest Arabica-producing state—received only 0.3 mm of rainfall in the week ending October 24, or just 1% of the historical average. While upcoming rainfall could ease dry conditions, concerns remain about the impact on the critical flowering period for the 2026/27 crop.

Speculation is also mounting that the United States may lift tariffs on Brazilian coffee. Brazilian President Luiz Inácio Lula da Silva said he had a “surprisingly good” meeting with U.S. President Donald Trump on the sidelines of the ASEAN Summit in Malaysia, adding that a “definitive solution” on trade could be reached within days.

Last week, Arabica coffee prices hit an 8.5-month high amid fears that prolonged drought in Brazil’s growing regions could threaten the 2026/27 harvest. According to Bloomberg’s Brazil Weather Analysis, Minas Gerais has received only 70% of its average monthly rainfall over the past month.

Prices also gained support after the U.S. National Oceanic and Atmospheric Administration (NOAA) raised the probability of a La Niña weather pattern to 71% between October and December, a development that could intensify dry conditions across Brazil and further impact production.

Meanwhile, Robusta coffee faced pressure from an increase in Vietnamese supply. Vietnam’s National Statistics Office reported that coffee exports rose 10.9% year-on-year between January and September 2025 to 1.23 million metric tons. The Vietnam Coffee and Cocoa Association (Vicofa) forecasts that 2025/26 coffee production could rise 10% if weather conditions remain favorable, reaching 1.76 MMT (29.4 million bags) — a four-year high.

At the global level, the International Coffee Organization (ICO) reported that world coffee exports for the current marketing year (October–August) increased 0.2% year-on-year to 127.92 million bags, indicating adequate global supply.

In Brazil, crop forecasting agency Conab revised its 2025 Arabica coffee crop estimate down by 4.9% to 35.2 million bags, while lowering its total coffee production estimate by 0.9% to 55.2 million bags.

According to the U.S. Department of Agriculture’s Foreign Agriculture Service (FAS), global coffee production for 2025/26 is projected to increase 2.5% year-on-year to a record 178.68 million bags, with Arabica output expected to decline 1.7% to 97.02 million bags and Robusta production to rise 7.9% to 81.66 million bags. Brazil’s output is projected to increase 0.5% to 65 million bags, while Vietnam’s could grow 6.9% to 31 million bags.

Global ending stocks are forecast to rise 4.9% to 22.82 million bags, compared with 21.75 million bags in 2024/25.

Global Coffee Prices Fall as U.S.–Brazil Trade Talks Raise Hopes for Tariff Relief

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New York – Qahwa World

Coffee prices continued to decline on Monday as traders reacted to signs of a possible breakthrough in trade negotiations between the United States and Brazil. The downward movement follows a volatile week in which arabica and robusta futures hit multi-month highs before retreating sharply.

Market optimism grew after Brazil’s President Luiz Inácio Lula da Silva announced that his meeting with U.S. President Donald Trump, held on the sidelines of the ASEAN Summit in Malaysia, was “surprisingly good.” Lula hinted that both nations were close to finding a “definitive solution” on trade within days. This development has raised expectations that the heavy tariffs imposed on Brazilian exports, including coffee, could soon be eased.

Brazil, the world’s largest coffee exporter, has been significantly affected by the 50 % tariffs placed on its coffee shipments to the U.S. earlier this year. The duties have disrupted the normal flow of beans to American buyers, forcing many roasters to look for alternative suppliers. As a result, coffee inventories monitored by ICE have dropped to their lowest levels in over a year — arabica stocks fell to 447,773 bags and robusta holdings slipped to just over 6,000 lots. Since nearly one-third of the U.S. coffee supply comes from Brazil, any shift in trade policy could have immediate effects on American imports and retail prices.

Even as the diplomatic news eased some pressure, weather conditions in Brazil continue to concern the market. Somar Meteorologia reported that the main arabica-producing state of Minas Gerais received only 0.3 millimeters of rain in the week ending October 24 — about 1 % of its normal rainfall. The Bloomberg Brazil Weather Analysis confirmed that rainfall across the region has been about 30 % below average for the past month, fueling fears that prolonged dryness could reduce flowering and affect the 2026/27 crop yield.

Meanwhile, Vietnam’s coffee sector, the world’s largest producer of robusta, is showing the opposite trend. The Vietnam Coffee and Cocoa Association expects production in 2025/26 to increase by 10 % year-on-year if favorable weather continues. Official statistics show that the country exported 1.23 million metric tons between January and September 2025 — up 10.9 % from a year earlier — and total output for the upcoming season is projected to reach 1.76 million tons, equivalent to 29.4 million bags. This would mark Vietnam’s most productive season in four years and continue to weigh on robusta prices.

The International Coffee Organization also reported that global coffee exports from October to August rose slightly by 0.2 % to 127.9 million bags, suggesting that the overall supply remains sufficient despite regional challenges. In Brazil, crop forecasting agency Conab cut its 2025 arabica estimate in September by 4.9 % to 35.2 million bags, bringing total coffee production for the year to 55.2 million bags.

At the global level, the U.S. Department of Agriculture’s Foreign Agriculture Service (FAS) projects total coffee production for 2025/26 to reach 178.7 million bags — a 2.5 % increase year-on-year. Arabica output is expected to fall 1.7 % to 97 million bags, while robusta is forecast to grow 7.9 % to 81.6 million bags. Ending stocks are likely to rise nearly 5 % to 22.8 million bags, signaling more comfortable supply conditions heading into 2026.

However, climate factors may quickly change that outlook. The U.S. National Oceanic and Atmospheric Administration (NOAA) has raised the probability of a La Niña event to 71 % for the period between October and December. If it materializes, it could lead to drier-than-usual conditions across Brazil’s coffee-growing regions, threatening future yields.

For now, the coffee market remains pulled between political progress and environmental risk. The possibility of a U.S.–Brazil trade agreement could restore smoother coffee flows to the United States and ease supply constraints, but persistent drought conditions in South America and growing output in Southeast Asia continue to shape global price trends. Traders are watching both developments closely as the market searches for direction in the final quarter of 2025.

Easing Weather Threats in Brazil and Vietnam Weigh on Coffee Prices

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Dubai – Qahwa World

Coffee prices dropped sharply on Thursday after giving up early gains, with December Arabica down 2.54% and November Robusta falling 3.9%.

The decline came as weather conditions improved in two of the world’s largest coffee-producing countries. Forecasts from Brazil’s Climatempo predicted weekend rains across the coffee-growing regions, while Vietnam’s weather office reduced the likelihood of heavy rainfall from Tropical Storm Fengshen over the Central Highlands—its main coffee belt—lessening the risk of crop damage.

In Brazil, prices had earlier rallied on concerns over severe drought during the flowering phase of coffee trees, which is critical for the 2026/27 harvest. The state of Minas Gerais, the country’s largest Arabica-producing region, received only about 70% of its average rainfall in the past month.

In contrast, Robusta prices faced downward pressure following data from Vietnam’s National Statistics Office showing that the country’s coffee exports from January to September 2025 rose +10.9% year-on-year to 1.23 MMT. Production for 2025/26 is forecast to rise +6% to 1.76 MMT (approximately 29.4 million bags), the highest level in four years.

Lower inventories on the Intercontinental Exchange (ICE) provided only partial support. ICE-monitored Arabica stocks fell to a 19-month low of 465,910 bags, while Robusta stocks hit a 3-month low of 6,141 lots.

Optimism surrounding trade talks between the United States and Brazil also weighed on prices. Reports suggest discussions may lead to the removal of the 50% tariffs currently imposed on Brazilian imports, a move that could ease supply constraints in the U.S. market.

Meanwhile, International Coffee Organization (ICO) data showed that global coffee exports for the current 2024/25 season (October–August) rose +0.2% to 127.92 million bags, indicating ample supply.

Brazil’s crop forecasting agency Conab lowered its 2025 harvest estimate to 55.2 million bags (-0.9% from May), reducing Arabica output to 35.2 million bags (-4.9%).

According to the U.S. Department of Agriculture (USDA), global coffee production in 2025/26 is expected to rise +2.5% to a record 178.68 million bags, driven by a +7.9% increase in Robusta to 81.65 million bags, despite a -1.7% decline in Arabica output.

Trading company Volcafe projects a global Arabica deficit of 8.5 million bags for 2025/26—wider than the 5.5 million-bag shortfall recorded in 2024/25 and marking the fifth consecutive year of supply deficits.

Coffee Prices in Russia Soar to 4,000 Rubles per Kilogram

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Moscow – Qahwa World

Coffee prices in Russia have reached an all-time high, with instant coffee exceeding 4,000 rubles per kilogram for the first time. Ground and roasted coffee have also risen sharply, prompting a noticeable decline in demand of 4–11% across categories.

A Steep Climb Over the Past Year

According to Russia’s Federal State Statistics Service (Rosstat), the price of natural instant coffee rose to 4,006 rubles per kilogram in September 2025, up from 3,988 rubles in August — an annual increase of 18.3%. The price of ground and roasted coffee jumped to 1,994 rubles per kilogram, marking a 29.3% rise compared with last year. In the foodservice sector, the average cup of coffee now costs 110.9 rubles, up 13.6% year-on-year.

Analytics from Check Index show that between June and August, the average retail price of coffee reached 829 rubles, 12% higher than in 2024. The average receipt for whole-bean coffee grew by 22% to 1,508 rubles per pack, while instant coffee climbed 11% to 461 rubles. Ground coffee increased by 16% to 650 rubles, and coffee capsules saw a 17% rise to 881 rubles per pack.

Why Coffee Is Getting More Expensive

The primary driver of the surge is the global rise in coffee prices. Over the past year, Arabica prices have increased by 1.5 times, while Robusta surged by 40% in just three months.
The International Coffee Organization (ICO) attributes this to poor harvest conditions in Brazil, the world’s largest producer. Additional pressure has come from U.S. tariffs on Brazilian coffee, which encouraged American roasters to stockpile supplies. European roasters are also building reserves ahead of the EU’s deforestation-free supply regulations.

According to Olga Lebedinskaya, Associate Professor at the Plekhanov Russian University of Economics, domestic factors are also adding strain: inflation, higher transportation costs, international payment difficulties, and rising labor and rental expenses have all contributed to the surge.

“The market has become highly concentrated, leaving few alternative sources,” she explains. In 2025, Brazil overtook Vietnam as Russia’s main coffee supplier. From January to September, Russian companies imported $287.9 million worth of Brazilian coffee beans, nearly double the value imported during the same period in 2024.

Lebedinskaya notes that Laos could become an alternative source, but logistical barriers remain unresolved. “While for Russia this would serve as a niche complement to Brazilian and Vietnamese supplies, for Laos it means diversifying exports without raising costs dramatically,” she said.

What to Expect in 2026

Lebedinskaya forecasts that global price increases will reach Russia’s retail market with a six-month delay, meaning consumers are likely to see new price levels by spring 2026.
“Many coffee shops are already gradually adjusting their prices to soften the impact,” she noted, adding that the traditional tactic of replacing Arabica with cheaper Robusta is no longer effective, as both varieties are now priced nearly equally.

She expects coffee shops to expand their beverage menus by promoting alternatives such as matcha, chicory, and milk-based drinks, while espresso and Americano will likely see the fastest price growth.

According to Alexey Plugov, Director of the Agribusiness Analytical Center AB-Center, 2025 is set to record the highest average global coffee prices since the 1977 coffee crisis. In 2026, he predicts that prices will remain high but fall by 10–15% from 2025 levels.

Tea and Cocoa: Moderate Movements

Rosstat data show that as of October 6, the price of black tea in Russia reached 1,351.9 rubles per kilogram, rising 7.3% over the year — slower than the overall annual inflation rate of 8.1%. According to AB-Center, green tea prices grew by 3.9%, while black tea in bags increased by only 1.6%, averaging 84.7 rubles for a 25-bag pack.

In contrast, cocoa powder prices rose 7.1% year-on-year in September to 1,139 rubles per kilogram. Plugov notes that global tea prices could rise 8–12% in 2026, while cocoa prices may fall 5–10%, though still remaining well above 2022–2023 levels.

Tightening ICE Stocks Push Coffee Futures Higher

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Dubai – Qahwa World

Global coffee futures climbed as stocks registered on the Intercontinental Exchange (ICE) continued to shrink, tightening availability and pushing traders to reprice risk. December Arabica (KCZ25) rose about 1.78%, while November Robusta (RMX25) gained roughly 1.9%, reflecting increased buying interest across both contracts.

The market has been reacting to a notable decline in ICE-tracked inventories: Arabica holdings dropped to roughly 534,665 bags, a low not seen in about 18 months, and Robusta balances fell to near 6,237 lots, the lowest in a few months. A major contributor to tighter U.S. supplies has been new trade barriers: a 50% tariff on Brazilian coffee imports has prompted some American buyers to cancel or delay contracts, and because Brazil supplies about one-third of U.S. unroasted coffee, the effect has been pronounced.

Weather worries have compounded supply concerns. Key Arabica zones in Brazil — notably Minas Gerais — received barely measurable rainfall in early October, raising alarms about the crop’s flowering stage for 2026/27. Forecasters have also increased the odds of a La Niña episode through the October–December window, a pattern that can bring drier conditions to Brazil and add further downside pressure to yields.

Still, the global picture contains mixed signals. The International Coffee Organization reported a small year-on-year rise in exports for the current marketing window, pointing to continuing flows of coffee around the world. At the same time, Vietnam’s strong Robusta shipments — up double digits year-to-date — are helping keep robusta markets supplied.

Brazilian crop agencies and exporters have trimmed recent estimates or recorded export slowdowns: domestic forecasts for Arabica output have been revised lower and export volumes in some months have fallen sharply from year-earlier levels. Conversely, U.S. Department of Agriculture outlooks point to a modest increase in total world production for 2025/26, driven largely by a stronger Robusta harvest, while some trade houses continue to flag an Arabica shortfall.

The interplay of shrinking registered stocks, tariff-driven trade shifts and weather risks leaves prices vulnerable to swings — and keeps market attention trained on inventories, crop forecasts and buyer behavior in the coming weeks.

Coffee Prices Retreat on Rain Forecasts for Brazil

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Dubai –  Qahwa World

Coffee prices fell for the second consecutive day on Tuesday as forecasts pointed to rain across key coffee-growing regions in Brazil, easing previous concerns over dry conditions.

December arabica coffee (KCZ25) closed down 1.56% at –5.95, while November ICE robusta (RMX25) slipped 1.27% to –57. According to Climatempo, rainfall is expected to spread from São Paulo to Minas Gerais this week, with some regions receiving over 30 mm of precipitation — a welcome relief for farmers during the critical flowering stage of the 2026/27 crop.

The decline follows Monday’s report from the International Coffee Organization (ICO) showing that global coffee exports between October 2024 and August 2025 rose 0.2% year-on-year to 127.92 million bags, signaling abundant global supply.

Robusta prices also faced pressure from Vietnam, where the National Statistics Office reported that coffee exports from January to September 2025 surged 10.9% to 1.23 million metric tons (MMT), reinforcing supply-driven headwinds.

Just days earlier, coffee prices had hit two-week highs on worries about dry weather in Brazil. Somar Meteorologia reported that Minas Gerais — the nation’s largest arabica region — received only 0.9 mm of rain in the week ending October 4, representing just 3% of the historical average.

Adding to the market’s complexity, U.S. tariffs on Brazilian imports have tightened supply in the American market. The 50% tariff, imposed earlier this year, has led to a sharp drawdown in ICE-monitored inventories, with arabica stocks dropping to a 1.5-year low of 534,665 bags, and robusta stocks to a 2.5-month low of 6,293 lots. Roughly one-third of unroasted coffee consumed in the U.S. originates from Brazil, intensifying the domestic supply strain.

Meanwhile, the National Oceanic and Atmospheric Administration (NOAA) raised the likelihood of a La Niña event in the southern hemisphere to 71% for October–December 2025, potentially signaling drier conditions in Brazil later this year.

Brazil’s national crop forecasting agency Conab recently trimmed its 2025 arabica estimate by 4.9%, down to 35.2 million bags, and revised its total coffee production forecast to 55.2 million bags — a modest decrease from 55.7 million in May.

Earlier, Cecafé, Brazil’s coffee exporters’ council, reported that the country’s July exports fell 28% to 2.7 million bags, bringing total shipments for January–July 2025 down 21% year-on-year to 22.2 million bags.

On the other hand, Vietnam — the world’s largest producer of robusta — is expected to harvest a 4-year-high crop of 1.76 MMT (29.4 million bags) in the 2025/26 season, up 6% year-on-year.

The U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) projects global coffee production for 2025/26 to grow 2.5% year-on-year to a record 178.68 million bags, driven by a 7.9% increase in robusta output to 81.66 million bags, while arabica output is forecast to decline 1.7% to 97.02 million bags. FAS expects ending stocks to climb 4.9% to 22.82 million bags.

Despite these figures, Volcafe foresees a global arabica deficit of 8.5 million bags for 2025/26 — the fifth consecutive year of shortage — widening from 5.5 million bags last season.

Historic Drop in Certified Coffee Stocks Threatens Global Market Stability

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Dubai – Qahwa World

The global coffee market is entering a period of heightened uncertainty as certified coffee stocks fall to their lowest level in years, signaling tightening supply chains and growing pressure on prices. According to the International Coffee Organization’s (ICO) September 2025 Coffee Market Report, both Arabica and Robusta certified inventories saw steep declines, raising alarm among traders and producers about the sustainability of global coffee flows.

The ICO reported that certified Arabica stocks in the United States dropped by 19.3%, falling to 0.66 million 60-kg bags, while certified Robusta stocks in London declined by 4.3% to 1.08 million bags. The organization described these figures as a “clear indicator of tightening supply,” warning that if this trend continues, it could lead to further market volatility and stronger upward pressure on coffee prices into 2026.

The decline in certified stocks comes at a time when global coffee prices are already at a two-year high. The ICO Composite Indicator Price (I-CIP) averaged 324.62 US cents per pound in September — up 9.3% from August and 25.4% year-on-year. This sustained rally reflects a combination of supply shortages, export delays, and speculative momentum, according to the report. Analysts also note that the depletion of certified stocks is a major driver behind the surge, as roasters and traders draw down existing inventories to meet ongoing demand.

In Brazil, the world’s largest coffee producer and exporter, the situation remains complex. Despite a healthy harvest, export performance continues to weaken, with the Brazilian Coffee Exporters Council (Cecafé) reporting a tenth consecutive monthly decline. Shipments have been slowed by logistical congestion at the Port of Santos and delayed customs procedures, resulting in slower replenishment of certified stocks. Much of the crop, although harvested, remains stored domestically awaiting transport — a factor that continues to strain global availability.

Colombia, the world’s top producer of washed Arabica, is also struggling with weather disruptions in key coffee-growing regions and infrastructure setbacks that have limited its export capacity. Meanwhile, Vietnam, the largest Robusta supplier, has maintained stable production but faces supply chain bottlenecks that delay shipments to major consuming markets, particularly Europe and North America.

The ICO emphasized that these combined factors have created a fragile equilibrium in which global coffee demand remains resilient, but the flow of physical supply is insufficient to keep inventories stable. “The rate of certified stock depletion is now nearing levels not seen since 2021,” the report warned, adding that the balance between consumption and production is increasingly difficult to maintain amid logistical and policy-related challenges.

Trade policies are adding further complications. The United States’ 50% import tariff on coffee, still in place as of September 2025, continues to weigh heavily on trade volumes. Many importers have avoided purchasing new shipments at elevated costs, instead relying on existing certified reserves. This has accelerated the drawdown of available stock, pushing certified inventories closer to critical thresholds.

At the same time, monetary policy decisions have influenced speculative activity across commodity markets. The Federal Reserve’s recent 25-basis-point rate cut — its first since 2024 — triggered renewed investor interest in coffee futures, pushing prices even higher. The report noted that this speculative demand has intensified the pressure on physical stocks, as traders anticipate continued price gains and hedge against potential shortages.

The ICO also pointed to regulatory uncertainty in Europe as a factor contributing to the decline in certified inventories. Exporters are recalibrating their shipment schedules due to the forthcoming EU Deforestation Regulation (EUDR), which mandates traceability and geolocation data for coffee imports. While the European Commission has signaled a potential one-year delay in enforcement, many traders are opting to postpone shipments until compliance frameworks are clarified, further limiting short-term supply availability.

Market analysts caution that the combination of depleted stocks, policy delays, and persistent trade restrictions could lead to supply shortages in early 2026 if current trends persist. “The market is walking a fine line,” one analyst cited by the ICO noted. “With certified inventories at record lows, even minor disruptions — whether from weather, logistics, or policy shifts — could have an outsized impact on prices.”

This tightening supply scenario has already been reflected in the futures markets. ICE Arabica prices in New York rose by 11.5% in September, averaging 366.31 US cents per pound, while ICE Robusta prices in London climbed 8.9% to 197.56 US cents per pound. The price differential between the two markets widened by 14.7% to 168.75 US cents per pound, the highest level recorded in 2025. The ICO said the widening gap highlights uneven stock conditions and structural imbalances between Arabica and Robusta markets.

Furthermore, intra-day price volatility increased to 13.8%, compared to 10.6% in August, underscoring how thin inventories amplify market sensitivity to short-term developments. The report noted that low stock levels make the market more reactive to speculative trading, currency fluctuations, and export data releases.

Despite these challenges, some optimism remains tied to upcoming harvests in Central America and East Africa, which could provide temporary relief to global supplies. However, the ICO cautioned that recovery will likely be slow, as high fertilizer and labor costs continue to limit farm investment and productivity gains across several producing countries.

Ultimately, the ICO concluded that the historic decline in certified coffee stocks represents more than a temporary fluctuation — it reflects a deep structural imbalance in the global coffee economy. Persistent trade barriers, logistical delays, and delayed regulatory decisions have combined to restrict availability at a time when global demand remains robust. The report warned that unless export performance and stock replenishment improve by early 2026, the market could face an extended period of high prices and intensified volatility.

As the global coffee sector navigates this critical juncture, the ICO urged stakeholders — from producers to importers — to focus on efficient supply chain management, sustainable farming practices, and regulatory coordination to restore stability to the market. Without such measures, the world’s coffee supply chain risks remaining on edge well into the coming year.

Indonesia Expands Coffee Exports with New Shipment to Saudi Arabia

Posted on by Qahwa World

JAKARTA – Qahwa World

Indonesia has expanded its coffee export market with a new shipment of premium Arabica beans from the slopes of Mount Argopuro in East Java to Saudi Arabia, marking another milestone for the country’s growing smallholder coffee sector.

The shipment, totaling 15 tons and valued at around 3 billion rupiah (approximately 180,000 U.S. dollars), reflects Indonesia’s continued effort to strengthen its position in the global coffee trade and promote the role of micro, small, and medium enterprises in international markets. The consignment was officially dispatched on Monday, in a move hailed by government officials as a success story for local farmers and entrepreneurs.

Bagus Rachman, Deputy for Business Affairs at Indonesia’s Ministry of Micro, Small, and Medium Enterprises, said the export from Mount Argopuro demonstrates the competitiveness of Indonesian MSMEs on the global stage. He emphasized that more than 90 percent of the nation’s coffee plantations are managed by smallholder farmers, who have become the backbone of Indonesia’s coffee production and export activities. Rachman described the Argopuro shipment as a model of how medium-scale enterprises can become a driving force within the MSME ecosystem, creating added value and expanding export capacity.

According to Statistics Indonesia, the country’s coffee exports rose from 279.94 million kilograms in 2023 to 316.72 million kilograms in 2024, underscoring steady growth despite challenges from fluctuating prices and global demand pressures. East Java, where Mount Argopuro is located, remains one of Indonesia’s key coffee-producing regions, known for high-altitude Arabica beans characterized by their clean cup, moderate acidity, and distinct aroma.

Local officials in Situbondo Regency, the region surrounding Mount Argopuro, praised the export as a breakthrough for community-based farmer groups that have invested in quality improvement and post-harvest processing. They highlighted that Argopuro’s elevation, reaching about 1,800 meters above sea level, contributes to its unique flavor profile, making it increasingly sought after in Middle Eastern and Asian markets. The local government also called for stronger support programs to encourage youth participation in coffee farming and ensure long-term sustainability of production.

Data from Indonesia’s Ministry of Trade shows that the country exported coffee, tea, and related products worth more than 16 million U.S. dollars to Saudi Arabia in 2023. The new shipment from East Java is expected to deepen trade relations between the two nations, opening opportunities for future collaboration in the premium and specialty coffee segments. Saudi Arabia has become an emerging destination for Indonesian agricultural products, reflecting growing demand for high-quality Arabica beans in the region’s expanding coffee industry.

Industry observers say the success of this shipment could inspire similar initiatives across Indonesia’s coffee-growing provinces, including Aceh, North Sumatra, and South Sulawesi, where MSMEs are working to boost exports of specialty varieties. The government’s ongoing push to promote downstream processing, improve logistics, and introduce value-added branding is seen as essential to enhancing Indonesia’s competitiveness in international markets.

Indonesia, the world’s fourth-largest coffee producer, has long been known for its diverse range of beans, from Sumatra Mandheling to Java and Toraja. With global demand for Arabica and Robusta continuing to rise, initiatives like the Argopuro export are expected to help the country expand its share of premium coffee markets, create higher income for farmers, and reinforce Indonesia’s image as a leading origin in the world of coffee.

Global Coffee Prices Surge to 2-Year High

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Dubai – Qahwa World

The global coffee market witnessed a significant price surge in September 2025, marking one of the strongest monthly performances in recent years. According to the latest Coffee Market Report issued by the International Coffee Organization (ICO), the ICO Composite Indicator Price (I-CIP) averaged 324.62 US cents per pound, representing a 9.3% increase compared to August 2025 and a striking 25.4% rise year-on-year. The report reveals that while prices rose across all coffee groups, tightening certified stocks and persistent trade uncertainties continue to define the market’s volatile landscape.

The ICO noted that Arabica varieties led the monthly increase, with Colombian Milds climbing 10.1% to 403.77 US cents/lb, Other Milds advancing 9.3% to 400.21 US cents/lb, and Brazilian Naturals gaining 11.3% to 374.91 US cents/lb. Robusta, meanwhile, registered a more moderate yet notable 5.9% increase to 210.85 US cents/lb. The rise was mirrored on both major futures exchanges, with New York ICE prices up 11.5% to 366.31 US cents/lb, and London ICE prices increasing by 8.9% to 197.56 US cents/lb. The I-CIP fluctuated between 298.14 and 360.74 US cents/lb during the month, maintaining a median value of 323.44.

The report attributes much of September’s price escalation to several interconnected macroeconomic and policy-related developments that placed upward pressure on the market during the first half of the month. Among these, concerns over the long-term supply of coffee to the United States stood out, especially given the continued uncertainty surrounding import tariffs. Although on 8 September the U.S. administration issued an executive order revising tariffs for “aligned partners” with established trade agreements, coffee remained excluded from the list. The commodity continues to face a 50% import tariff imposed earlier in the year, as it is not yet categorized among products that the U.S. cannot sufficiently produce domestically. This policy has led to sustained apprehension among traders and exporters, particularly as U.S. certified Arabica stocks continue to decline.

The ICO underlined that certified stocks—used as a short-term substitute for coffee imports—are shrinking at an alarming rate, reinforcing market tightness. U.S. certified stocks of Arabica fell 19.3% in September to 0.66 million 60-kilogram bags, while London-certified Robusta stocks decreased 4.3% to 1.08 million bags. These drawdowns, the report states, indicate that the market is “starting to feel the squeeze,” signaling a bullish outlook for prices if replenishment remains weak.

However, the latter half of September brought developments that introduced downward pressure and tempered speculative enthusiasm. On 15 and 17 September, the ICE Futures U.S. exchange raised margin requirements for Arabica contracts twice in a single week. Higher margin requirements force investors to deposit more capital with brokers to cover increased credit risk, thus raising borrowing costs for both new and existing positions. The ICO explained that such moves can reduce liquidity and limit speculative demand, potentially stabilizing prices in overheated markets.

At the same time, discussions at the United Nations General Assembly between U.S. and Brazilian officials provided a momentary boost to market optimism. As the world’s largest coffee producer and the largest destination market sought to improve bilateral trade relations, investors interpreted the talks as a signal that tariff détente might eventually follow. Brazil’s exports have been under severe strain, declining for ten consecutive months due to both cyclical production factors and logistical issues at the port of Santos.

On the monetary front, the U.S. Federal Reserve’s 25-basis-point interest rate cut on 17 September had a nuanced impact. While the policy was intended to lower borrowing costs across the economy, it indirectly affected coffee prices by making speculative trading less expensive. The ICO noted that cheaper credit may have helped sustain trading volumes, adding volatility to a market already under pressure from tightening supplies.

The European Union also entered the spotlight in September after the EU Commissioner for Environment, Water Resilience and a Competitive Circular Economy raised concerns over the readiness of the EU Deforestation Regulation (EUDR) IT system. The Commissioner indicated that the system might not be able to handle the expected transaction volume, suggesting a possible one-year extension before enforcement begins. The EUDR, which aims to ensure that coffee and other commodities imported into the EU are deforestation-free, has been a major topic of concern among exporters since its adoption, and any delay could temporarily ease compliance-related pressures on coffee-producing nations.

Despite these counterbalancing developments, overall volatility continued to rise. The ICO reported that intra-day volatility of the I-CIP increased by 2.8 percentage points compared to August, averaging 13.8% in September. By category, Colombian Milds and Other Milds showed volatility of 14.0% and 13.7%, respectively, Brazilian Naturals 14.7%, and Robustas 15.0%. At the futures level, New York volatility stood at 15.2%, while London measured 16.2%, reflecting a minor uptick in speculative activity.

Price differentials also widened notably. The Colombian Milds–Other Milds differential expanded from 0.41 to 3.56 US cents/lb, while the Colombian Milds–Robustas differential rose 15.1% to 192.92 US cents/lb. The arbitrage between the London and New York markets, a key indicator of the spread between Arabica and Robusta, widened by 14.7% to 168.75 US cents/lb, the highest level of the year.

Overall, the ICO described September as a month defined by tightening supplies, speculative activity, and geopolitical uncertainty. The consistent decline in certified stocks, combined with unresolved tariff tensions and potential EUDR delays, continues to reinforce a bullish sentiment across the market. As the fourth quarter of 2025 begins, analysts expect coffee prices to remain elevated, with volatility likely to persist until structural issues—such as logistics bottlenecks, regulatory clarity, and weather-related production concerns—are addressed.

In summary, the ICO’s latest data depict a coffee market under strain but also opportunity. Prices are buoyed by constrained supply and investor sentiment, while trade policies and financial dynamics continue to influence short-term movements. With the I-CIP climbing above 320 US cents/lb for the first time in over two years and certified stocks hitting new lows, September 2025 may well be remembered as a turning point in the evolving balance between global coffee supply and demand.

Brazil Set to Overtake Vietnam as the World’s Largest Robusta Coffee Producer

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Dubai – Qahwa World

Brazil is on track to surpass Vietnam as the world’s leading producer of robusta coffee, according to a new report by Dutch bank Rabobank. The report highlights Brazil’s growing advantage due to robusta’s resilience to heat, drought, and disease — key traits as climate change increasingly threatens arabica production.

Rabobank estimates Brazil’s robusta output will reach 24.7 million 60-kg bags in 2025, up from 19 million bags in 2020. Meanwhile, Vietnam is projected to produce around 30 million bags in 2025/26, according to the U.S. Department of Agriculture.

Unlike arabica, which offers a milder flavor and is favored by premium brands such as Starbucks and Nespresso, robusta has a stronger taste and higher caffeine content. It is mainly used in instant coffee, espresso blends, and iced beverages.

Over the past five decades, temperatures in Brazil’s key coffee regions have risen by 1.3 to 1.6°C, while rainfall has decreased by up to 211 millimeters. To adapt, Brazilian farmers have increasingly relied on irrigation — now covering 71% of robusta farms — with this figure projected to reach 363,800 hectares by 2040.

Although the initial investment in robusta plantations is high (around $15,700 per hectare), its productivity is 170% higher per hectare than arabica, enabling cost recovery in about four years, Rabobank said.

The report also noted that Brazil has about 28 million hectares of degraded pastureland suitable for deforestation-free agricultural expansion, creating significant room for robusta growth.

Additionally, the EU’s exemption of instant coffee from deforestation regulations could boost global demand for robusta-based products, further accelerating Brazil’s rise in production.

August Export and Market Update

In August 2025, Brazil exported 3.1 million bags (60kg) of coffee — down 17.5% year-on-year (YOY) but up 14.3% compared to July, according to data from Cecafé. Despite the monthly recovery, exporters continue to face difficulties due to adverse weather conditions affecting the arabica harvest and the 50% U.S. tariff introduced in August. Moreover, even with a good harvest pace, coffee has been taking longer to reach exporters this year.

Exports to the United States dropped 46% YOY and 26% from July, totaling 301,000 bags. Despite the sharp decline, the U.S. remained Brazil’s second-largest destination, behind Germany, and continues to be the world’s top coffee importer in 2025.

The barter ratio — the amount of coffee needed to purchase one metric ton of fertilizer — improved significantly in August. Only 1.2 bags (60kg) were required to buy one ton of fertilizer (blend 20-05-20), down 29% from August 2024 (1.7 bags) and 26% from July (1.6 bags). The improvement was driven by rising coffee prices and falling fertilizer prices, particularly for urea, boosting producer profitability.

After several months of decline, coffee prices rebounded sharply in August, with arabica up 31% and conilon (robusta) up 32%. The price rally was fueled by slower Brazilian exports and low global inventories, while the new U.S. tariffs added further volatility. The move has prompted U.S. roasters to seek alternative supply sources. In the short term, the U.S. industry is expected to rely on existing inventories while awaiting potential tariff renegotiations. One immediate workaround has been the use of bonded warehouses, which allow coffee storage without immediate tariff payments. Since the tariff announcement on July 9, certified stocks in New York have fallen by 157,000 bags.

The EU Deforestation Regulation (EUDR) has also influenced trade flows. Anticipating compliance challenges, European buyers increased imports early in 2024, and a similar pattern is expected in the second half of 2025. Data shows that European coffee inventories have been building in recent months.

Weather conditions in August were seasonally dry, which supported the near-complete harvest. However, frost affected some arabica-producing regions, particularly in Cerrado Mineiro, where local cooperatives estimate potential losses of around 412,000 bags for the 2026 crop. While this raises concerns for the next harvest, analysts say the 2026/27 arabica and conilon cycle remains positive overall. In the coming weeks, market attention will turn to rainfall and flowering, as any threat to crop potential could further support coffee price gains.