Tag: Cecafé exports

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

Posted on by Qahwa World

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.

Brazil Dryness Ahead of Flowering Period Boosts Coffee Prices

Posted on by Qahwa World

Dubai, September 8, 2025 (Qahwa World) – Coffee prices surged today, with December arabica futures rising by +9.65 cents per pound (+2.58%) and November robusta contracts climbing +$119 per ton (+2.76%). The rally comes as severe dryness in Brazil’s coffee-growing regions raises concerns about yields ahead of the critical flowering period. Meteorology agency Somar reported that Minas Gerais, Brazil’s largest arabica-producing state, received no rainfall during the week ending September 6.

Additional support came from Brazil’s crop forecasting agency Conab, which cut its 2025 arabica crop estimate by -4.9% to 35.2 million bags, down from 37 million bags projected in May. Conab also lowered its total coffee production forecast for 2025 by -0.9% to 55.2 million bags.

Meanwhile, the International Coffee Organization (ICO) reported that global coffee exports in July fell -1.6% year-on-year to 11.6 million bags, while cumulative exports for October through July were down -0.3% at 115.6 million bags.

Tighter stocks at the ICE exchange are also supporting prices. ICE-monitored arabica inventories dropped to a 1.25-year low of 686,863 bags last week before slightly rebounding to 692,766 bags. Robusta inventories remain close to a 1.5-month low at 6,552 lots.

U.S. supplies are under additional pressure from trade measures. American buyers have begun canceling contracts for Brazilian beans following the imposition of 50% tariffs on imports, tightening supply as about one-third of U.S. unroasted coffee comes from Brazil.

Harvest progress in Brazil is also influencing prices. Cooxupé, the country’s largest coffee cooperative, reported that its members’ harvest was 94.9% complete by August 29. Separately, Safras & Mercado estimated the national 2025/26 crop at 99% complete by August 20, with robusta fully harvested and arabica 98% complete.

Export data shows a sharp decline. Brazil’s Trade Ministry reported that unroasted coffee exports in July fell -20.4% year-on-year to 161,000 tons. Exporter group Cecafe said green coffee exports were down -28% to 2.4 million bags, with arabica shipments falling -21% and robusta plunging -49%. Total shipments from January through July dropped -21% to 22.2 million bags.

Vietnam, the world’s second-largest coffee producer, also faces challenges. Its 2023/24 crop fell -20% to 1.472 million tons, the smallest in four years, while 2024 exports dropped -17.1% to 1.35 million tons. However, January–August 2025 exports rose +7.8% year-on-year to 1.141 million tons. The Vietnam Coffee and Cocoa Association reduced its 2024/25 output estimate to 26.5 million bags, down from 28 million bags.

Looking ahead, the U.S. Department of Agriculture (USDA) projects global coffee production for 2025/26 to rise +2.5% to a record 178.7 million bags. Arabica output is expected to fall -1.7% to 97 million bags, while robusta production is forecast to grow +7.9% to 81.6 million bags. Ending stocks are projected to climb +4.9% to 22.8 million bags. However, trading group Volcafe warns of an -8.5 million bag global arabica deficit in 2025/26, compared with a -5.5 million bag deficit in 2024/25—marking the fifth consecutive year of shortages.

Coffee Prices Surge on Dry Weather in Brazil and Tighter U.S. Supplies

Posted on by Qahwa World

Dubai, 21 August 2025 (Qahwa World) – Coffee prices continued their sharp rally this week, reaching multi-month highs as drought in Brazil, tighter U.S. supplies, and falling inventories combined to fuel bullish sentiment in global markets. September arabica coffee (KCU25) closed up +4.05 cents (+1.14%), while September robusta coffee (RMU25) jumped +236 points (+5.35%), marking the strongest levels for arabica in more than two months and for robusta in two and a half months. The upward trend has now extended for over two weeks, signaling growing concerns among traders and roasters alike.

Much of the momentum is driven by weather conditions in Brazil, the world’s largest producer. Somar Meteorologia reported that Minas Gerais, the country’s main arabica-growing state, received no rainfall during the week ending August 16. Dry conditions at this stage of the harvest have spurred funds and speculators to increase their positions in coffee futures. While dryness helps in harvesting ripe cherries, prolonged lack of rain threatens the health of trees and could affect the next cycle’s yield, especially for arabica, which is more sensitive to climatic stress.

At the same time, the United States, one of the biggest coffee importers, is facing its own supply squeeze. Following the imposition of 50% tariffs on Brazilian coffee exports, American buyers have been avoiding new contracts and seeking loopholes in existing ones to escape the higher levies. Some have even requested extended shipping timelines in hopes that trade restrictions may eventually ease. With about a third of unroasted coffee consumed in the U.S. normally sourced from Brazil, the tariffs have significantly tightened the market.

Export figures from Brazil reinforce the tightening picture. The country’s Trade Ministry reported that unroasted exports in July dropped -20.4% year on year to 161,000 metric tons, while Cecafé, the exporters’ council, confirmed that green coffee exports fell -28% to 2.4 million bags. Within that total, arabica shipments declined -21% and robusta plunged nearly -49%. Overall, Brazil’s coffee exports in July fell to 2.7 million bags, and shipments for the first seven months of the year were down -21% to 22.2 million bags compared to the same period in 2024.

Another layer of support for prices comes from declining inventories on the Intercontinental Exchange (ICE). Arabica stocks dropped to a 1.25-year low of 726,661 bags last week before inching up slightly, while robusta inventories sank to a three-week low of 6,732 lots, still well below the two-year high reached in late July.

Even as supply pressures mount, Brazil’s harvest progress offers a short-term counterbalance. Cooxupé, the country’s largest cooperative and exporter, announced that its members had harvested 86.1% of their crop by August 15. Independent consultancy Safras & Mercado placed national progress at 94% complete, with nearly all robusta and more than 90% of arabica cherries already picked. This suggests that near-term supply will remain steady, though the longer-term outlook is clouded by weather concerns.

Globally, the International Coffee Organization (ICO) reported that exports in June rose +7.3% year on year to 11.69 million bags, though cumulative shipments for October through June were nearly flat at 104.14 million bags, down -0.2% compared to the previous year. Meanwhile, in Vietnam, the world’s largest robusta producer, production in 2023/24 fell -20% to 1.472 million metric tons, the smallest harvest in four years, due to severe drought. Exports for 2024 slipped -17.1% to 1.35 million metric tons, and the Vietnam Coffee and Cocoa Association has already cut its production forecast for 2024/25 to 26.5 million bags, down from an earlier estimate of 28 million. Yet, despite these challenges, Vietnam’s exports in the first seven months of 2025 rose +6.9% to 1.05 million metric tons, providing some temporary relief to the international market.

Looking ahead, projections from the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) suggest that world coffee production in 2025/26 will increase +2.5% year on year to a record 178.68 million bags. Arabica output is expected to fall -1.7% to 97.02 million bags, while robusta is forecast to rise +7.9% to 81.65 million bags. Brazil is projected to produce 65 million bags (+0.5%), and Vietnam is forecast to reach a four-year high of 31 million bags (+6.9%). Ending stocks are expected to climb by nearly +4.9% to 22.82 million bags. Still, major trader Volcafe has warned of a widening deficit in arabica, projecting a shortfall of -8.5 million bags for 2025/26, compared with -5.5 million bags this year. If accurate, this would mark the fifth consecutive year of arabica deficits, ensuring that upward pressure on prices will likely persist well into next year.