Tag: coffee market 2025

Arabica Leads the Recovery: Coffee Outperforms Sugar, Cotton, and Cocoa in Q3 2025

Posted on by Qahwa World

Dubai – Qahwa World

The agricultural commodities sector gained 1.89% in Q3 2025, driven by strong advances in Arabica coffee and frozen concentrated orange juice (FCOJ) futures. Despite the quarterly rise, the sector remained 19.25% below its 2024 closing level, with four of five major agricultural commodities ending lower and two down more than 40%.

Arabica coffee was the best-performing agricultural commodity in Q3, climbing 22.2% amid concerns over Brazil’s crop outlook and posting a 17.23% year-to-date increase. Futures closed at $3.7485 per pound at the end of September and climbed further to $4.0875 by mid-October, marking coffee as the standout performer of 2025 so far.
The monthly chart shows sustained bullish momentum that began in late 2024.

Cocoa, however, led the downside after reaching an all-time high of $12,931 per ton in late 2024. Prices plunged 27.86% in Q3 and 42.19% since the start of 2025, closing at $6,749 per ton in September and falling below $5,900 in mid-October. Analysts point to commodity cyclicality — high prices trigger oversupply, larger inventories, and weaker demand.

World sugar futures (#11) rose 4% in Q3 but are still 16.41% lower year-to-date. Prices settled at 16.10 cents per pound at the end of September, well below the November 2023 peak of 28.14 cents. By mid-October, March 2026 contracts were trading near 15.60 cents, extending the bearish trend.

Cotton prices slipped 0.77% in Q3 and 3.85% year-to-date. Futures closed September at 65.77 cents per pound and hovered slightly lower at around 65 cents in mid-October. Cotton has trended downward since the May 2022 high of $1.5595 per pound, though current levels may offer a foundation for recovery if production contracts due to low prices.

While FCOJ gained 11.90% in Q3, it remained the worst-performing agricultural commodity year-to-date, down 51.04%. Prices fell from a December 2024 record of $5.4315 per pound to $2.4355 by the end of September and slipped below $2 in mid-October.
Analysts note that FCOJ’s limited liquidity amplifies volatility, with low open interest and trading volumes causing sharper price swings.

As Q4 begins, coffee prices remain elevated while cocoa, sugar, cotton, and FCOJ continue to slide. However, sugar and cotton may find cyclical support, as low prices typically drive production cuts, inventory drawdowns, and stronger demand — setting the stage for a rebound.

Weather conditions, crop health, trade policies, and geopolitics will continue to shape volatility across agricultural commodities. While coffee may face corrective pressure after its rally, sugar and cotton appear the most likely candidates for recovery — particularly cotton, which tends to peak in Q1–Q2 amid planting uncertainty. With prices below 66 cents per pound, cotton could emerge as the strongest recovery play for 2026.

“Agricultural commodities led the asset class in 2023 and 2024 but have fallen behind in 2025. Yet, cyclicality remains the driving force — where lows are found, the next rallies begin.”

Ethiopia Earns $762.7 Million from Coffee Exports in Q1 FY 2025/26

Posted on by Qahwa World

Addis Ababa – Qahwa World

Ethiopia generated $762.75 million in revenue from coffee exports during the first quarter of the 2025/26 fiscal year, according to the Ethiopian Coffee and Tea Authority. The figure represents a 47% increase, or $243.73 million more than the same period last year, exceeding both export and revenue targets.

Dr. Adugna Debela, Director General of the Authority, announced that the country exported 113,542 tons of coffee between July and September 2025, achieving 75% of the planned export volume of 151,969.41 tons. However, the revenue reached 123% of the quarterly target of $622.5 million, underscoring higher prices and stronger market performance.

Leading Destinations

Germany remained the largest buyer, importing 20,793.14 tons (18%) and contributing $138.18 million (18%) to total earnings. Saudi Arabia followed with 16,088.45 tons (14%), generating $102.18 million (13%), while Belgium ranked third with 13,910.92 tons (12%) and $93.45 million (12%) in revenue.

Other key destinations included China (4th), the United States (5th), South Korea (6th), the United Arab Emirates (7th), Japan (8th), Italy (9th), and the Russian Federation (10th). Together, these top ten markets accounted for 80% of the total export volume and 79% of Ethiopia’s foreign exchange earnings. Compared with the same period of the previous fiscal year, the top destinations saw 3% growth in export volume and a significant 52% increase in revenue.

Key Drivers Behind the Growth

Dr. Adugna attributed the strong performance to multiple strategic initiatives introduced by the Authority, including:

Expanding coffee export markets to new destinations such as China.

Enhancing data quality and modernizing trade monitoring through a centralized coffee database and a secure data exchange system that tracks daily shipments.

Providing traders and stakeholders with monthly global and domestic market updates to support informed decision-making.

Reinforcing supervision to ensure exporters meet delivery timelines and contractual obligations.

Introducing a weekly minimum contract selling price aligned with global market trends.

Strengthening bilateral cooperation and knowledge exchange with countries that have advanced coffee production and management experience.

The Authority emphasized that these measures are part of Ethiopia’s broader effort to maximize export revenues and solidify its position as Africa’s leading coffee producer and exporter.

Bad News for Coffee Drinkers: U.S. Tariffs Push Prices to Record Highs

Posted on by Qahwa World

Dubai – Qahwa World

Times are getting tougher for coffee drinkers as tariffs push already record-high prices even higher.

When former U.S. President Donald Trump announced new tariffs on imports in April, many in the industry believed coffee would be spared since the U.S. barely produces it domestically. But by midyear, a 10% duty was imposed on most imported coffee, including shipments from Brazil—the world’s top supplier. In August, those tariffs on Brazil rose sharply to 50%.

For roasters like Chad Seegers of Low Country Coffee Roasters in Charleston, South Carolina, the impact has been immediate. “Raw-bean prices have doubled for us,” he said. Wholesale prices to his customers have risen by 30–40%, while retail prices climbed by about 25%. “Brazilian coffee, which made up 80% of our best-selling blend, is simply not feasible anymore.”

The industry was already struggling before tariffs. According to Fernando Maximiliano of StoneX, global coffee output has been hit repeatedly by droughts, frosts, and extreme weather since 2020, leaving global inventories at just 36–37 million bags in 2024, down from nearly 59 million in 2020. “Persistent supply shocks had already fueled inflation in coffee markets. Tariffs only intensified the strain,” Maximiliano explained.

The data shows the severity: U.S. city prices for 100% ground roast coffee hit $8.87 per pound in August 2025—the highest on record since tracking began in 1980. Futures markets reflect the pressure too. Arabica “C” contracts in New York have surged nearly 20% this year, peaking at $4.29 a pound in February.

Trade flows are already adjusting. ING’s food and agriculture economist Thijs Geijer noted that U.S. imports of Brazilian coffee plunged more than 75% in August compared with a year earlier, while exports from Colombia and Vietnam have remained stable. American buyers are now sourcing from alternative markets with lower tariffs.

Still, the adjustment is costly. Seegers said some family growers from Cameroon and Costa Rica refused to sell to the U.S. altogether rather than deal with tariff rules. Profit margins for his roastery have been cut in half, and he warned: “A $4.50 latte is now $7 in some cafés.”

According to Geijer, much of the tariff-driven cost increase has not yet reached store shelves. With the 50% tariff on Brazilian coffee only taking effect in August, existing inventories are still being used. “Expect the tariff impact to start hitting retailers in the fourth quarter,” he warned.

Starbucks, the world’s largest coffee chain, confirmed in its July earnings call that its hedging strategies delay cost spikes, but said year-over-year increases are expected to peak in the first half of fiscal 2026.

Despite the financial hit, Seegers said his company refuses to compromise on quality: “We chose to absorb most of the cost increases rather than cut corners.” But the stress is mounting. Higher prices are slowing demand, squeezing both roasters and cafés.

With U.S. coffee lovers already paying more than ever before, the worst may still be ahead. “High-tariff coffee hasn’t even fully hit the shelves yet,” Geijer warned. For millions of Americans, their daily cup may soon cost more than they ever imagined.

Ethiopia Raises Capital Requirements for Coffee Exporters

Posted on by Qahwa World

Addis Ababa – September 14, 2025 – (Qahwa World) – The Ethiopian Coffee and Tea Authority (ECTA) has announced sweeping changes to the country’s coffee export regulations, significantly increasing the minimum capital required for exporters. The move, introduced under Directive 1106/2025, aims to professionalize the sector, reduce malpractice, and ensure higher quality standards in Ethiopia’s leading export industry.

Private coffee exporters must now hold a starting capital of 15 million birr, up from just 1 million birr — a 15-fold increase. Trade associations and corporate entities such as joint stock and limited liability companies face an even steeper jump, from 1.5 million birr to 20 million birr, more than 13 times the previous threshold. ECTA stated that previous rules were inadequate to monitor exporters and prevent the misuse of certificates of competence.

In addition to higher financial requirements, all exporters — except farmer exporters — are now obligated to establish an ECTA-certified coffee laboratory for basic quality testing. They must also employ a qualified coffee taster with at least a diploma and a renewed proficiency certificate, with each taster restricted to serving only one dispatcher.

The decision has divided stakeholders. Veteran exporter Semachew Ababu welcomed the directive, saying it would “refine the market” by filtering out under-funded players and ensuring greater consistency in quality for international buyers.

But smaller businesses voiced concerns. Entrepreneur Sosena Desalegin criticized the sudden hike, calling it “impossible to raise that much money overnight for a new business,” warning that it could stifle new entrants and competition.

Independent experts acknowledged the directive’s goal of curbing illegal practices but cautioned against the unintended consequences. “It may limit the sector to a few large players, which is not healthy for long-term growth and diversification,” one expert observed.

The new guidelines came into effect this week and are expected to reshape Ethiopia’s coffee export market, potentially concentrating power in the hands of larger companies while tightening quality controls across the sector.

Brazil’s Dryness Continues to Fuel Global Coffee Price Surge

Posted on by Qahwa World

Dubai, September 12, 2025 – Qahwa World – Global coffee markets surged sharply on Friday, with December arabica futures climbing +10.75 cents (+2.78%) to a four-month high and November robusta futures rising +$80 (+1.77%) to a one-and-a-half-week peak.

The rally is being driven primarily by ongoing drought in Brazil, the world’s largest coffee producer. Weather agency Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-producing state, received no rainfall during the week ending September 6 — a critical period just ahead of the flowering stage for coffee trees.

A stronger Brazilian real added further bullish momentum, rallying to a 15-month high against the US dollar on Friday. A stronger real typically discourages coffee exports, as producers are less incentivized to sell abroad.

In the United States, concerns over tighter supplies are mounting as buyers cancel new contracts for Brazilian beans following the imposition of 50% tariffs on imports. Roughly one-third of America’s green coffee supply comes from Brazil, making the tariffs a significant disruptor for the US market.

Tightness in ICE-monitored inventories has also supported prices. Arabica stocks fell to a 16-month low of 669,251 bags, while robusta inventories declined to a two-week low of 6,557 lots.

Adding to the bullish outlook, Brazil’s crop forecasting agency Conab cut its 2025 arabica production estimate by -4.9% to 35.2 million bags from its May forecast of 37 million. Total Brazilian coffee output for 2025 was also revised lower by -0.9% to 55.2 million bags.

On the trade side, the International Coffee Organization (ICO) reported that global exports in July fell -1.6% year-on-year to 11.6 million bags. Cumulative exports from October to July slipped -0.3% year-on-year to 115.6 million bags.

Brazil’s July shipments added more pressure to the supply side. The Trade Ministry reported that unroasted coffee exports dropped -20.4% year-on-year to 161,000 metric tons. Exporter group Cecafe confirmed a steeper fall, with green coffee exports plunging -28% to 2.4 million bags. Arabica exports dropped -21% while robusta exports plunged -49%. Cecafe added that total July shipments fell -28% to 2.7 million bags, while cumulative January–July exports fell -21% to 22.2 million bags.

Meanwhile, Brazil’s harvest is nearly complete. Cooxupé, the country’s largest coffee cooperative, reported that 97% of its members’ harvest was completed by September 5. Separately, consultancy Safras & Mercado noted that the national 2025/26 harvest reached 99% by August 20, including 100% completion of robusta and 98% of arabica.

In Vietnam, the world’s second-largest producer, 2023/24 coffee output fell -20% year-on-year to 1.47 million metric tons, the smallest crop in four years. Exports in 2024 fell -17.1% to 1.35 million metric tons. However, the General Statistics Office reported that January–August 2025 exports rose +7.8% to 1.14 million metric tons.

Looking ahead, the USDA’s Foreign Agricultural Service (FAS) projected on June 25 that global coffee production in 2025/26 will rise +2.5% year-on-year to a record 178.68 million bags. The forecast includes a -1.7% decline in arabica to 97.02 million bags and a +7.9% increase in robusta to 81.65 million bags. Brazil’s 2025/26 crop is expected to rise +0.5% to 65 million bags, while Vietnam’s production is forecast to grow +6.9% to 31 million bags, a four-year high. Global ending stocks are forecast to rise +4.9% to 22.8 million bags, up from 21.7 million in 2024/25.

However, trader Volcafe has issued a more cautious outlook, projecting a global arabica deficit of -8.5 million bags in 2025/26, compared with a -5.5 million bag deficit in 2024/25. This would mark the fifth consecutive year of deficits for arabica, underscoring structural supply concerns.

The combination of Brazil’s drought, lower exports, shrinking inventories, and global trade pressures highlights the fragility of the balance between supply and demand — setting the stage for further volatility in one of the world’s most important agricultural commodities.

Vietnam Coffee Prices Hit Historic High at 117,500 VND/kg

Posted on by Qahwa World

Dubai, 18 August 2025 (Qahwa World) – Coffee prices in Vietnam continued their sharp upward trend on August 17, climbing by 2,500–2,800 VND per kilogram across major producing regions. Average domestic purchase prices now range between 116,800 and 117,500 VND/kg, marking one of the highest levels recorded this season, according to Báo Gia Lai.

Regional Price Updates

  • Gia Lai Province: Prices rose by 2,600 VND/kg to reach 117,200 VND/kg.

  • Lam Dong Province: Prices increased by 2,800 VND/kg, bringing the average to 116,800 VND/kg.

  • Dak Nong Province: Prices advanced by 2,500 VND/kg to 117,500 VND/kg, the highest among major regions.

  • Dak Lak Province: Coffee traded at 117,300 VND/kg, up 2,500 VND/kg from the previous day.

Drivers Behind the Price Rally

Economic experts attribute the surge primarily to dwindling domestic supplies. After months of intensive harvesting, coffee stocks held by farming households have fallen to low levels. Meanwhile, exporters are aggressively buying to fulfill international contracts, intensifying pressure on local prices.

Global Coffee Market Trends

Vietnam’s domestic rally comes against the backdrop of strong movements in global futures markets:

  • Robusta futures (November 2025 delivery) rose by USD 506 per tonne, equivalent to a 14.2% weekly gain.

  • Arabica futures (December 2025 delivery) surged by USD 340 per tonne to USD 7,370 per tonne (about 192,100 VND/kg), a 10.5% rise compared with the previous week.

This follows four consecutive sessions of triple-digit increases in Robusta futures, underscoring heightened volatility driven by tight supply concerns worldwide.

Context and Outlook

The latest jump builds on an already rapid price escalation earlier this month, when domestic coffee crossed the 107,000 VND/kg threshold for the first time. Analysts warn that continued low inventories combined with strong export demand could sustain upward pressure in the coming weeks.

Vietnam, the world’s largest Robusta producer, plays a critical role in global supply. Any prolonged imbalance in its domestic market may have ripple effects internationally, particularly in Europe and Asia where Robusta beans are heavily used in instant coffee and espresso blends.