Dubai, 13 August 2025 (Qahwa World) – Coffee futures gained on Wednesday, supported by reports of light frost in Brazil’s Cerrado Mineiro region and a significant drop in the country’s robusta exports.
September arabica coffee (KCU25) closed up +4.45 cents (+1.41%), while September ICE robusta coffee (RMU25) surged +206 points (+5.53%) to reach a two-month high.
Weather Impact
Light frost earlier this week in Cerrado Mineiro, one of Brazil’s key arabica-producing areas, prompted concerns in the market, although initial assessments suggest damage is minimal. Above-average rainfall in Minas Gerais last week (4.8 mm, or 109% of the historical average) eased dryness concerns, potentially limiting upward price pressure.
Exports Driving the Rally
According to exporter group Cecafe, Brazil’s July green coffee exports fell -28% year-on-year to 2.4 million bags. Arabica exports declined -21%, while robusta exports plunged -49%. Total July coffee exports dropped -28% to 2.7 million bags, with January–July shipments down -21% to 22.2 million bags.
The sharp decline in robusta exports, combined with short-covering after previous market losses, was a major factor behind robusta’s price surge. Brazil’s July unroasted coffee exports also fell -20.4% y/y to 161,000 metric tons.
Falling Inventories
ICE-monitored arabica inventories fell to a 1.25-year low of 736,411 bags on Wednesday. Robusta inventories dropped to a two-week low of 6,928 lots, slightly below the one-year high recorded at the end of July.
Harvest Progress
Safras & Mercado reported that Brazil’s 2025/26 coffee harvest was 94% complete as of August 6, ahead of last year’s 92% at the same time. Robusta harvest is 99% finished, while arabica is 91% complete. Cooxupé, Brazil’s largest coffee cooperative and exporter, said its members had harvested 80.4% of their crop by August 8.
Trade Policy Concerns
Market attention is also on U.S. trade policy, as President Trump has yet to exempt coffee from a proposed 50% tariff on Brazilian exports, a move that could impact sales to the U.S. and increase domestic inventories in Brazil.
Global Supply Picture
The International Coffee Organization (ICO) reported global coffee exports in June rose +7.3% y/y to 11.69 million bags, though cumulative October–June exports slipped -0.2% to 104.14 million bags.
The USDA’s June forecast projects global 2025/26 coffee production will rise +2.5% y/y to a record 178.68 million bags, with arabica output down -1.7% to 97.02 million bags and robusta production up +7.9% to 81.66 million bags. Ending stocks are expected to increase +4.9% to 22.82 million bags.
Vietnam’s Role in Robusta Supply
Vietnam’s 2023/24 coffee production fell -20% y/y to 1.472 million metric tons due to drought—the smallest crop in four years. The Vietnam Coffee and Cocoa Association has lowered its 2024/25 production forecast to 26.5 million bags, down from December’s estimate of 28 million bags. However, Vietnam’s Jan–July 2025 exports rose +6.9% y/y to 1.05 million metric tons.
Deficit Outlook
Despite higher overall global production, Volcafe forecasts a -8.5 million bag global arabica deficit in 2025/26—wider than the -5.5 million bag shortfall in 2024/25—marking the fifth consecutive year of deficits.
