Tag: Brazil coffee production

Global Coffee Prices Fall as Brazil Crop Outlook Signals Oversupply

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Dubai – Qahwa World

Global coffee prices declined at the start of the week as expectations of strong supply weighed on market sentiment, particularly with Brazil’s harvest approaching.

Arabica coffee had already fallen to its lowest level in several weeks, pressured by forecasts pointing to a potentially record-breaking Brazilian crop for the 2026/27 season. Analysts from multiple firms have raised their production estimates, with projections suggesting output could exceed 75 million bags. If realized, this would mark a significant increase from the previous season and reinforce expectations of abundant supply.

The global balance is also shifting. Current estimates indicate that the coffee market could move into a much larger surplus in 2026, compared to a relatively modest surplus the year before. This outlook has contributed to the recent downward trend in prices.

Vietnam is adding further pressure to the market. As the world’s leading robusta producer, the country has reported rising export volumes in early 2026, continuing the strong performance seen last year. Production is also expected to increase, reaching a multi-year high and boosting global robusta availability.

Despite the broader bearish outlook, some factors are offering limited support to prices. Robusta inventories monitored by exchanges have recently dropped to their lowest level in over a year, indicating tighter short-term supply.

There are also ongoing concerns about global trade conditions. Higher shipping and logistics costs continue to affect the coffee sector, increasing expenses for exporters and roasters and adding uncertainty to supply chains.

Meanwhile, Brazil’s recent export data shows a decline compared to the same period last year, suggesting a temporary tightening in available shipments even as larger future harvests are anticipated.

Looking ahead, global coffee production for the 2025/26 season is still expected to reach a record level. While arabica output may see a slight decrease, robusta production is forecast to rise significantly, helping to balance overall supply. Ending stocks are projected to decline modestly, indicating that while supply is strong, stock levels may not increase dramatically.

Coffee Prices Rise as Iran Conflict Disrupts Global Shipping

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Dubai – Qahwa World

Coffee prices climbed on Thursday as escalating tensions in the Middle East raised concerns about global supply chains and shipping routes.

May arabica coffee futures increased by 6.75 points (2.35%), while May robusta contracts gained 82 points (2.31%), reflecting market reactions to geopolitical developments affecting maritime trade.

The rise follows reports that the Strait of Hormuz, a critical global shipping corridor, could face disruption due to the ongoing conflict involving Iran. Statements from Iranian leadership suggested the strategic waterway could be used as leverage, while defense officials in the United Kingdom indicated evidence that mines may be placed in the strait.

The potential closure of the route has pushed up global shipping rates, insurance costs, and fuel expenses, increasing operational costs for coffee importers, traders, and roasters worldwide.

You may read: Global Coffee Exports Surge Amid Asian Growth and Latin American Decline

However, gains in coffee prices remain limited due to favorable weather conditions in Brazil. Forecasts indicate rainfall in major coffee-growing regions, which could support crop development and ease supply concerns.

Adding further pressure on prices, commodity analytics firm StoneX raised its forecast for Brazil’s 2026/27 coffee production to a record 75.3 million bags, compared with its previous estimate of 70.7 million bags.

Meteorological data from Somar Meteorologia also showed that Brazil’s largest arabica-producing region, Minas Gerais, received 14.9 mm of rainfall last week, equivalent to about 35% of the historical average.

Meanwhile, Brazilian export data offered some support to the market. According to Cecafe, Brazil’s green coffee exports fell 27% year-on-year in February, while the country’s Trade Ministry reported a 17.4% annual decline, bringing total shipments to 142,000 metric tons.

Inventory movements are also shaping market sentiment. Stocks of arabica monitored by the Intercontinental Exchange (ICE) recently reached a five-month high of 564,626 bags before easing slightly to 552,192 bags. Robusta inventories also rose to a 3.5-month high earlier this month before declining modestly.

Read also: ICO February 2026 Report: Has the Inflationary Wave Receded?

Earlier in February, coffee prices dropped sharply amid expectations of a strong Brazilian crop. Brazil’s agricultural supply agency Conab projected the country’s 2026 coffee production at 66.2 million bags, including 44.1 million bags of arabica and 22.1 million bags of robusta.

On a global scale, Rabobank estimates coffee production could reach 180 million bags in the 2026/27 season, an increase of roughly 8 million bags compared with the previous year.

Vietnam, the world’s largest robusta producer, continues to influence market dynamics. Government statistics show Vietnam’s coffee exports rose 14% year-on-year in January–February 2026 to 366,000 metric tons, while exports in 2025 climbed 17.5% to 1.58 million metric tons. Production in the 2025/26 season is projected to reach 1.76 million metric tons, the highest level in four years.

Read Also: Coffee Prices Drop on Brazil Weather and Rising Stocks

Despite these supply signals, the International Coffee Organization (ICO) reported that global coffee exports for the current marketing year have declined 0.3% year-on-year to 138.658 million bags.

Looking ahead, the USDA’s Foreign Agricultural Service forecasts global coffee production in 2025/26 at 178.848 million bags, with arabica output expected to decline 4.7% and robusta production projected to increase 10.9%. Ending global stocks are expected to fall 5.4% to 20.148 million bags.

Market analysts say the coffee sector remains caught between geopolitical risks affecting trade routes and expectations of strong global production, creating a volatile outlook for prices in the months ahead.

Coffee Prices Mixed as Brazil Rainfall Lags and Vietnam Exports Surge

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Dubai – Qahwa World

Coffee futures ended mixed on Monday, January 5, with arabica prices settling higher while robusta declined to a one-week low. March arabica coffee rose about 0.6%, supported by below-normal rainfall in Brazil and a stronger Brazilian real, while March robusta fell between 1% and 2.5% under pressure from rising Vietnamese supplies.

Arabica prices drew support after Somar Meteorologia reported that Minas Gerais—Brazil’s largest arabica-growing region—received just 47.9 millimeters of rain in the week ending January 2, only 67% of the historical average. Weather concerns remain important for Brazil, the world’s largest arabica producer. Additional support came from the Brazilian real strengthening to a three-week high against the U.S. dollar, which discourages Brazilian growers from selling coffee into export markets.

In contrast, robusta prices weakened as supply concerns eased. Vietnam’s National Statistics Office reported that 2025 coffee exports surged 17.5% year over year to 1.58 million metric tons. Vietnam is the world’s largest robusta producer, and expectations for higher output continue to weigh on prices. Production for the 2025/26 season is projected to rise about 6%, with industry groups suggesting output could climb as much as 10% if weather remains favorable.

Inventory trends remain mixed but generally supportive. ICE-monitored arabica inventories fell to a 1.75-year low in November before rebounding modestly in late December, while robusta inventories also recovered slightly after hitting a one-year low earlier in the month. Meanwhile, U.S. coffee stocks remain tight after American buyers sharply reduced Brazilian purchases last fall due to temporary import tariffs, which caused U.S. imports from Brazil to drop more than 50% year over year during that period.

Longer-term supply expectations continue to pressure the market. Brazil’s crop agency Conab recently raised its 2025 production estimate to 56.54 million bags. Globally, the USDA projects world coffee production in 2025/26 will rise 2% to a record level, driven by strong growth in robusta output despite a projected decline in arabica production. Ending stocks are expected to fall modestly, offering some offsetting support.

Overall, the coffee market remains caught between near-term weather and currency support for arabica and ample robusta supplies led by Vietnam, keeping prices volatile and direction mixed.

Coffee Prices Rise as Brazilian Real Strengthens and Supply Risks Grow

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Dubai – Qahwa World

Coffee futures finished higher on Friday after reversing early weakness, supported by currency movements and renewed supply concerns. March arabica coffee contracts rose sharply, while March robusta prices posted a modest gain.

A key driver of the rebound was strength in Brazil’s currency. The Brazilian real climbed to its strongest level in roughly two weeks against the U.S. dollar, making exports less attractive for Brazilian producers. That shift prompted short covering in coffee futures and helped lift prices into the close.

Weather-related disruptions in Southeast Asia are also lending support. Severe flooding in Indonesia has affected a significant portion of arabica-growing areas in northern Sumatra. Industry officials estimate the damage could cut Indonesia’s coffee exports by up to 15% during the 2025/26 season. Indonesia is a major global supplier, particularly of robusta coffee, and any reduction in output adds to market uncertainty.

Concerns about Brazil’s crop conditions have not faded. Recent data from a private weather firm showed that Minas Gerais—Brazil’s largest arabica-producing region—received far less rainfall than normal in late December. Below-average moisture during this critical period has raised doubts about yield potential for the upcoming harvest.

Inventory trends remain another supportive factor. Arabica coffee stocks monitored by ICE fell to multi-year lows in November before rebounding modestly in recent weeks. Robusta inventories followed a similar pattern, touching their lowest levels in a year before seeing a short-term recovery. Despite the recent uptick, overall stock levels remain relatively tight by historical standards.

On the demand side, U.S. coffee inventories remain constrained. Earlier trade barriers sharply reduced American purchases of Brazilian coffee during late summer and early fall. Although those tariffs have since been reduced, imports have yet to fully recover, leaving supply channels under pressure.

Still, longer-term supply expectations continue to cap rallies. Brazil’s national crop agency recently raised its estimate for the country’s 2025 coffee output, citing improved conditions compared with earlier forecasts. Meanwhile, robusta markets remain weighed down by strong production and export data from Vietnam.

Vietnamese coffee shipments surged late last year, and output for the 2025/26 season is expected to rise further if weather remains favorable. As the world’s largest robusta producer, Vietnam’s expanding supply continues to temper bullish sentiment in that segment of the market.

Globally, mixed signals persist. While international coffee exports have edged slightly lower year over year, production forecasts point to a record crop in the coming season. Arabica output is projected to decline, but gains in robusta production are expected to more than offset those losses. Ending stocks are forecast to fall modestly, suggesting a tighter balance than last year but not an outright shortage.

Overall, coffee prices are being pulled in opposite directions—near-term supply risks and currency dynamics are supporting the market, while expectations of ample global production continue to limit upside potential.

Coffee Prices Surpass $4 per Pound Amid Global Supply Strains and Trade Tensions

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Dubai, September 16, 2025 (Qahwa World) – The global coffee market has once again taken center stage as New York arabica futures surged above $4 per pound for the first time since April. This sharp rally reflects a confluence of factors—from severe drought in Brazil and dwindling inventories to U.S. import tariffs and weaker global exports—raising new concerns about supply stability.

A Sharp Rally in Prices

On Monday, arabica futures jumped 3.6%, bringing total gains since early August to nearly 47%. In New York, arabica rose 3.1% to $4.0905 per pound, while robusta in London climbed 3.6%. The steep rise has fueled market anxiety, with momentum indicators signaling overbought conditions: the 14-day relative strength index crossed above 70, pointing to unusually rapid gains.

Brazil at the Epicenter

Brazil, the world’s top coffee producer, remains at the heart of the current price surge. According to meteorological firm Somar Meteorologia, the key producing states of Minas Gerais and São Paulo face abnormal heat and drought, while Espírito Santo is also expected to receive below-average rainfall. Such conditions threaten the upcoming flowering stage—a critical period for setting the next harvest due in mid-2026.

Brazil’s crop forecasting agency Conab lowered its 2025 arabica output estimate by 4.9% on September 4, cutting projections to 35.2 million bags from 37 million in May. Overall coffee production was revised to 55.2 million bags from 55.7 million previously.

Currency movements are amplifying the pressure: the Brazilian real rallied to a 15-month high against the U.S. dollar, discouraging export sales and lending further bullish support to global coffee prices.

U.S. Tariffs Tighten Supply

Trade tensions are another driving force. The U.S. imposed a 50% tariff on Brazilian coffee imports, prompting American buyers to cancel new contracts. This shift is tightening domestic supplies, particularly significant given that nearly one-third of U.S. unroasted coffee imports come from Brazil. Analysts warn this could amplify short-term volatility.

Shrinking Inventories

The decline in exchange-monitored stockpiles underscores the strain on global supply. ICE-monitored arabica inventories fell Monday to a 16-month low of 666,337 bags. Robusta inventories also slipped to a two-week low of 6,556 lots, hovering just above the seven-week low reached in late August.

Reduced reserves highlight how vulnerable the market is to further disruptions, with less buffer available to absorb shocks.

Export Slowdowns Worldwide

Export data confirms these tightening conditions. The International Coffee Organization (ICO) reported on September 3 that global exports fell 1.6% year-on-year in July to 11.6 million bags. Cumulative shipments from October through July declined 0.3% to 115.6 million bags.

Brazilian exports have been particularly weak. The Trade Ministry reported a 20.4% year-on-year drop in July shipments of unroasted coffee to 161,000 metric tons. Exporter group Cecafe said July green coffee exports fell 28% to 2.4 million bags, with arabica shipments down 21% and robusta plunging 49%. Overall, Brazil’s exports in July totaled 2.7 million bags, while January–July shipments fell 21% to 22.2 million bags.

Vietnam Adds to the Strain

Vietnam, the world’s second-largest producer, is also struggling. Production in the 2023/24 crop year fell 20% to 1.47 million metric tons, the smallest crop in four years, while exports for 2024 dropped 17.1% to 1.35 million tons. The Vietnam Coffee and Cocoa Association in March lowered its 2024/25 production estimate to 26.5 million bags from 28 million.

Yet more recent figures show some rebound: Vietnam’s National Statistics Office reported January–August 2025 exports up 7.8% year-on-year to 1.14 million tons, highlighting mixed signals from the world’s robusta powerhouse.

Mixed Forecasts and Outlook

The outlook remains divided. The USDA’s Foreign Agriculture Service (FAS) projects global coffee production in 2025/26 will rise 2.5% year-on-year to a record 178.7 million bags. Arabica production is forecast to fall 1.7% to 97 million bags, while robusta is expected to jump nearly 8% to 81.7 million bags. Ending stocks are seen climbing 4.9% to 22.8 million bags.

By contrast, commodity trader Volcafe projects a global arabica deficit of 8.5 million bags in 2025/26, widening from a 5.5 million bag shortfall this season. This would mark the fifth consecutive year of supply deficits for arabica, underscoring persistent structural imbalances.

Harvest Progress in Brazil

One counterweight to bullish factors is Brazil’s rapid harvest progress, which typically exerts downward pressure on prices. On September 5, cooperative Cooxupé reported that its members had harvested 97% of their crops. Separately, Safras & Mercado said Brazil’s 2025/26 harvest was 99% complete as of August 20, compared with 98% at the same time last year. Robusta harvesting was complete, and arabica was 98% finished.

Still, despite the near-completion of the harvest, broader supply-side issues—including weather stress and declining exports—continue to outweigh the potential bearish impact of fresh beans entering the market.

The Bigger Picture

The coffee market now finds itself caught between conflicting forces. On one side are bullish drivers: drought in Brazil, U.S. tariffs, shrinking inventories, weaker exports, and long-term arabica deficits. On the other side are bearish signals, including harvest completion and USDA’s optimistic production outlook.

For now, the bullish momentum dominates. The symbolic $4-per-pound threshold has been breached, highlighting the fragility of coffee supply chains. With climate uncertainty, trade disputes, and tightening stockpiles all in play, volatility looks set to remain a defining feature of the global coffee market in the months ahead.

Why Have Coffee Prices Surged Again Globally?

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Dubai, September 9, 2025 (Qahwa World) – Coffee prices are once again on the rise, pushing global markets into a renewed bullish phase after months of volatility and decline. Analysts point to a mix of climate pressures, trade barriers, falling inventories, and speculative buying as the key forces driving the market upward.

Arabica coffee futures on the Intercontinental Exchange (ICE) climbed above $3.70 per pound in early September 2025, nearing record levels last seen at the beginning of the year. This rebound followed a sharp downturn during the first half of 2025, when prices fell by 19.22% in the second quarter and dropped 4.07% overall in the first six months, closing June at $3.0675 per pound.

On July 8, 2025, the December Arabica contract reached its lowest point of the year at $2.72 per pound. From there, the market staged a dramatic recovery, rallying nearly 43.9% to $3.9130 by August 28. The turnaround signaled a renewed long-term bullish momentum for coffee.

Climate Concerns Put Pressure on Supply

Brazil, the world’s largest coffee producer, is facing challenging weather conditions, including drought in some regions and unusually cold temperatures in others. These climate issues have heightened concerns about reduced crop yields in the upcoming harvest.

At the same time, ICE data shows that open interest in coffee futures rose 11.5% between August 12 and August 28, climbing from 146,352 to 163,170 contracts, highlighting increased speculative activity. Meanwhile, ICE coffee inventories fell to multi-year lows, further tightening global supply.

Tariffs Fuel the Rally

Adding to the pressure, the United States has imposed additional tariffs on coffee imports from Brazil and Vietnam, the two largest exporters. These trade barriers have raised costs for roasters, while well-capitalized Brazilian farmers have held back sales, using the tight market to strengthen their negotiating position. The result has been an acceleration of the rally in coffee prices.

Starbucks Feels the Impact

Rising green coffee costs are weighing directly on Starbucks, one of the world’s biggest buyers. While U.S. equity markets reached new highs in August, Starbucks shares underperformed. From March 3 to September 5, 2025, the stock fell 27.5% from $117.46 to $85.06, before closing at $85.32—6.4% below the year-end 2024 level. Analysts point to rising input costs, particularly coffee, as a major factor behind the decline.

Lack of Investment Vehicles

Since the iPath Coffee Subindex ETF ceased trading in June 2023, investors seeking direct exposure to coffee have had to rely exclusively on futures and options listed on ICE. Each futures contract represents 37,500 pounds of green coffee. At $3.7365 per pound on September 5, the December contract was valued at approximately $140,118.75. With an initial margin requirement of $10,659, traders can control the contract with just 7.6% upfront, though they must meet maintenance margin calls if equity falls below $9,690.

Outlook: Volatility Ahead

Looking forward, analysts expect heightened volatility in the coffee market over the coming weeks and months. Climate challenges in Brazil, tariff-driven trade distortions, and dwindling inventories will continue to keep upward pressure on prices. While the long-term trend remains bullish, sharp fluctuations are likely to remain a defining feature of the global coffee trade.