Tag: Coffee Prices

Coffee Prices Retreat on Rain Forecasts for Brazil

Posted on by Qahwa World

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.

Global Coffee Prices Surge to 2-Year High

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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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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.

US Congress Moves to Exempt Coffee from Tariffs

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Dubai – Qahwa World 

A bipartisan bill titled the “No Coffee Tax Act” has been introduced to the United States Congress, aiming to repeal tariffs placed on coffee imports under the Trump administration.

The United States is the largest coffee importer in the world, with production limited only to Hawaii and Puerto Rico. Yet, tariffs currently affect major exporting nations. Goods from Brazil face a 50% tariff, Vietnam 20%, India 50%, Mexico 25%, and Indonesia 19%, all above the administration’s base rate of 10%.

The bill, sponsored by Nebraska Representative Don Bacon and California Representative Ro Khanna, has already drawn support from Virginia’s Don Beyer and New Hampshire’s Maggie Goodlander.

Bacon emphasised that taxing a crop not grown at scale in the US is harmful to consumers: “Families across America are already paying 21% more for coffee. Tariffs on a product we cannot produce commercially only make things worse. They are simply a tax on consumers, raising costs without creating jobs.”

He further highlighted that Congress, under Article One of the Constitution, holds tariff-setting authority, and this legislation reasserts that power.

If passed, the bill would exempt coffee—green, roasted, decaffeinated, husks, skins, and substitutes containing coffee—from any tariffs imposed after January 19, 2025.

The US coffee industry has strongly supported the measure, arguing that coffee cannot be grown at a scale sufficient to meet demand. A petition launched by roaster Coffee Bros in April 2025 has already gathered nearly 15,000 signatures.

Khanna compared the tariffs to Britain’s tax on tea before the American Revolution: “Americans started a revolution over a tax on tea. Today, US coffee prices have surged in part due to these tariffs. Our bipartisan bill is simple—it removes Trump’s tariffs on coffee to bring down costs.”

According to Reuters, the legislation is expected to be formally introduced on Friday. Bacon expressed optimism that the measure would not only reduce prices for consumers but also prompt a wider debate on Congress reclaiming its constitutional role in tariff policy.

Coffee Prices Mixed as Robusta Surges and Arabica Faces U.S. Tariff Pressure

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Coffee futures ended Monday in mixed territory as robusta prices climbed on concerns over heavy rains in Vietnam, while arabica remained under pressure from uncertainty surrounding U.S. tariff policy and ongoing harvest progress in Brazil. December arabica (KCZ25) fluctuated during the session and ultimately closed down -1.50 (-0.41%), while November robusta (RMX25) gained +121 (+2.93%).

The sharp rise in robusta was fueled by forecasts of heavy rainfall across Vietnam’s Central Highlands, the country’s key growing area, which could damage cherries entering their final stage of development before harvest. Vietnam, the world’s largest producer of robusta, continues to play a decisive role in global market movements. Despite the short-term weather risks, the country is still expected to deliver a bumper crop, with 2025/26 production projected to climb 6% year-on-year to 1.76 million metric tons, or 29.4 million bags, the highest level in four years. Export momentum remains strong as well, with shipments from January to August up 7.8% compared with the previous year, reaching 1.141 million metric tons.

Arabica, meanwhile, faced renewed selling pressure linked to the policy debate in Washington, where lawmakers are considering a bill that would exempt coffee imports from tariffs. The United States currently maintains a 50% tariff on Brazilian imports, a measure that has disrupted traditional trade flows and forced buyers to cancel contracts. This has tightened U.S. supplies significantly, with ICE-monitored arabica inventories falling to a 17-month low of 643,341 bags. Robusta inventories also dropped to a 1.75-month low of 6,464 lots. The trade impact is considerable, since Brazil accounts for roughly one-third of America’s unroasted coffee imports.

While tariffs weigh on demand for arabica, supply-side pressures in Brazil are offering a degree of support. Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-producing state, received only 10.5 millimeters of rain during the week ending September 20, representing just 73% of the historical average. September is a critical flowering month for coffee trees, and any shortage of rain could compromise the next crop cycle. Earlier this month, Brazil’s crop agency Conab cut its forecast for the 2025 arabica harvest by 4.9% to 35.2 million bags and lowered total coffee production to 55.2 million bags, reinforcing concerns about supply.

Globally, the balance remains tight despite expectations of record output. The USDA’s Foreign Agriculture Service projects that world coffee production will increase by 2.5% in 2025/26 to reach 178.68 million bags. Arabica output, however, is forecast to decline 1.7% to 97 million bags, while robusta is expected to rise by nearly 8% to 81.6 million bags. This uneven growth underlines the structural imbalance in the market. Commodity trader Volcafe has warned that the arabica deficit will widen to 8.5 million bags in 2025/26, compared with 5.5 million bags in the previous cycle, marking the fifth consecutive year of shortfalls.

Export figures add further weight to bullish sentiment. The International Coffee Organization reported earlier this month that global shipments in July fell 1.6% year-on-year to 11.6 million bags, while cumulative exports for the first ten months of the current season declined 0.3%. Brazil’s shipments saw particularly sharp declines. Data from the Trade Ministry showed that unroasted coffee exports in July plunged 20.4% to 161,000 metric tons, while exporter group Cecafe reported green coffee shipments down 28% to 2.4 million bags. Robusta exports collapsed by nearly half. In total, Brazil’s shipments between January and July dropped 21% to 22.2 million bags.

In the short term, harvest pressure continues to weigh on arabica prices. Brazil’s Cooxupe cooperative, the country’s largest exporter group, reported that its members had completed 98.9% of the harvest by September 12, signaling that near-term supply remains ample. Yet market participants remain cautious about the months ahead, with the National Oceanic and Atmospheric Administration forecasting a 71% chance of La Niña developing between October and December. Such a weather pattern could intensify drought conditions in Brazil and place the 2026/27 crop at risk.

The global coffee market thus finds itself pulled in opposite directions. On one side, robusta prices are supported by immediate weather risks in Vietnam, while arabica is weighed down by trade policy uncertainty and harvest dynamics in Brazil. On the other, tightening inventories, shrinking exports, and the prospect of continued arabica deficits provide a strong bullish undertone. With weather volatility and geopolitical trade policies both in play, analysts expect price swings to remain a defining feature of the market for months to come.

Lavazza Doubles UK Profits Despite Record Coffee Costs in 2025

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Italian coffee giant Lavazza has doubled its UK profits despite grappling with severe supply chain disruption and record-high green coffee costs. Strategic price increases and high-profile sponsorships have helped the brand maintain momentum in one of its key European markets.

Lavazza UK reported a pre-tax profit of £3.2 million ($4.3m) in 2024, compared with £1.5 million ($2m) the previous year. Sales rose 8% year-on-year to £110.3 million ($149m), marking the second consecutive year revenues surpassed the £100m threshold. The Turin-based roaster strengthened its UK presence through partnerships with Wimbledon, Arsenal Football Club, and Ascot Racecourse, initiatives that it said significantly boosted brand visibility and consumer recognition. Lavazza has also operated a flagship store in London since 2021, reinforcing its retail footprint.

In its Companies House filing, the company acknowledged “unprecedented” cost pressures tied to climate change, geopolitical tensions, and volatile green coffee markets. Despite leveraging Lavazza Group’s global procurement strategies to hedge against volatility, it admitted that part of the inflationary burden had to be passed on to consumers. “The company benefits from the policies adopted by the Lavazza Group to limit the impact of volatility within the coffee market,” Lavazza UK stated. “However, despite these measures, the company has had to mitigate the increased risk by passing some inflation to its customers and consumers.”

According to company figures, UK households consume 13 million cups of Lavazza coffee every week and use 1.4 million capsules. Raising prices has been a key lever for sustaining modest revenue growth and absorbing cost pressures in an environment where inflation has pushed up the cost of everyday goods. Data from consumer watchdog Which? indicates that retail coffee prices in the UK climbed by up to 40% in the 12 months to March 2025.

Still, there are signs of relief. Speaking to UK press in July 2025, Lavazza Group Chairman Giuseppe Lavazza suggested that record coffee prices may have already peaked, potentially bringing stability to supermarket shelves. On a global scale, the group absorbed €600m ($658m) in additional costs since 2022 but nonetheless achieved record revenues of €3.35bn ($3.67bn) in 2024, underlining the strength of its brand across more than 140 markets.

Founded in 1895, Lavazza remains one of the world’s most prominent coffee roasters. Its performance in the UK highlights how strategic pricing and brand-building investments have enabled it to withstand inflationary shocks while continuing to expand its international footprint.

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

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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.

Yemeni Coffee Achieves Record Heights at the Best of Yemen 2025 Auction

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Dubai – September 2025 (Qahwa World) – The Best of Yemen 2025 auction, organized by Qahwa Al Qimma (Qima Coffee), has come to a historic close after two days of global bidding that stretched across 12 intense hours. The event not only broke price records but also highlighted the resilience of Yemeni farmers and the global demand for their unique coffees.

The auction witnessed unprecedented participation, with servers overwhelmed after 11 hours of bidding and forced into a temporary pause. When resumed the following day, just one more hour of spirited competition was enough to crown this year’s winners.

The Top Lots

1st Place: Yahya Al Faqeeh, offering the rare Yemenia variety processed naturally, achieved the highest price of the auction at $851.50 per pound for 37 lbs. The winning buyer was Black Sip Coffee Roasters, securing one of the most expensive Yemeni coffees in history.

2nd Place: Maghrib Ans XV (Kent, Alchemy process), 110 lbs, sold for $320.50/lb to Sulalat.

3rd Place: Hejrat Al Ain Women Farmers XV (Yemenia, Alchemy process), 88 lbs, reached $327.50/lb, purchased by Albhaa Roastery and Out of Line.

4th Place: Bait Yaseen XI (Yemenia, Alchemy process), 110 lbs, sold for $196.50/lb to Entro Coffee Egypt and ESS’s Roasters Saudi Arabia.

Women Farmers in the Spotlight

Women-led lots stole the spotlight this year. Coffees from Hejrat Al Ain, Hayma Dakhiliya, Bait Al Yaziji, and Al Mezab all ranked among the top positions, underscoring the growing role of Yemeni women in shaping the country’s specialty coffee renaissance.

Global Buyers

Bidders came from across the Middle East, Asia, Europe, and North America. Notable names included George Howell Coffee Company (USA), Slope Roastery (Saudi Arabia), Andes Coffee Roaster (Latin America), and several specialty roasters from China and Europe. The diversity of buyers confirmed Yemen’s status as a global benchmark for rare and exclusive coffees.

Auction Figures

Total lots: 33

Total weight: 2,857 lbs

Total value: $391,632

Average price (weighted): $137.08/lb

Median price: $109/lb

Highest price: $851.50/lb

Lowest price: $50.50/lb

Lots over $100/lb: 21

In its closing statement, the organizer said: “This milestone is not only about record prices—it is about the resilience of Yemeni coffee and the farming communities behind it. The unwavering commitment of our buyers and partners makes these moments possible year after year.”

The Best of Yemen 2025 auction was more than a commercial success; it was a cultural milestone. It brought together farmers cultivating coffee in the mountains of Yemen with roasters across the globe, uniting two ends of a shared story: those who grow coffee at its birthplace and those who bring it to the world’s cups.

Coffee Prices Plunge on Rain Forecasts for Brazil

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Dubai, September 18, 2025 – (Qahwa World) – Global coffee markets faced a sharp downturn on Wednesday as prices tumbled amid forecasts of long-awaited rainfall in Brazil, the world’s largest coffee producer. December arabica futures (KCZ25) closed down -33.70 cents, a steep -8.23%, marking a one-week low. November ICE robusta futures (RMX25) also plunged by -331 points, or -6.92%.

The sudden reversal came just a day after arabica reached a contract high and robusta hit a three-week peak, driven by drought conditions. Forecasts now indicate showers in Brazil’s key coffee-growing regions beginning next week, triggering heavy long liquidation in the market.

Brazil’s Cooxupe cooperative, the largest in the country, announced that the harvest among its members was 98.9% complete as of September 12, adding further bearish pressure. The completion of the harvest, coupled with improved weather outlooks, weighed heavily on investor sentiment.

Yet underlying fundamentals remain tense. Earlier this month, Brazil’s crop forecasting agency Conab revised its 2025 arabica production estimate down by -4.9% to 35.2 million bags, while total coffee output was trimmed to 55.2 million bags. Global supply challenges also persist: the International Coffee Organization (ICO) reported that July exports fell -1.6% year-on-year, while cumulative exports from October to July slipped -0.3%.

On the demand side, U.S. buyers continue to face supply strain due to 50% tariffs on Brazilian coffee, effectively tightening the American market, where one-third of unroasted coffee imports come from Brazil. Meanwhile, ICE-monitored inventories continue to dwindle, with arabica stocks dropping to a 16.5-month low of 659,949 bags and robusta inventories falling to a 1.5-month low of 6,551 lots.

Vietnam, the world’s second-largest coffee producer, is also under scrutiny. Severe drought reduced the 2023/24 crop by -20% year-on-year to 1.472 million metric tons, the smallest harvest in four years. Exports in 2024 declined -17.1%, though shipments from January to August 2025 were up +7.8% year-on-year, showing signs of recovery.

Looking ahead, the USDA’s Foreign Agriculture Service projects global coffee production in 2025/26 will reach a record 178.68 million bags, up +2.5% year-on-year, supported by strong robusta output. However, research firm Volcafe warns that arabica will face a deficit of -8.5 million bags in 2025/26, the fifth consecutive year of shortage.

For now, rain forecasts in Brazil have calmed fears of immediate supply disruption, but the broader picture of tightening inventories, tariffs, and shifting climate risks ensures that volatility will remain a defining feature of the global coffee market.

Brazil Coffee Harvest 2025/2026: A Decent Crop Amid Market Volatility

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São Paulo – September 16, 2025 – Qahwa World (EFICO’s Coffee Bean Scene) – There is an old saying in the coffee world: “When Brazil sneezes, the rest of the coffee world catches a cold.” The phrase remains true today. With the upcoming Brazil Coffee Harvest 2025/2026, accounting for nearly 40% of global production, Brazil continues to dictate the rhythm of supply, prices, and the flavor profiles that reach consumers around the globe. At times, it offers stability; at others, it sparks volatility across the market. In fact, the Brazil Coffee Harvest 2025/2026 will likely dominate coffee sector discussions for the coming year.

The past has proven this influence repeatedly. The frost of 1975 sent international prices soaring, while the droughts of 2014 and 2021 created deep uncertainty for exporters. Currency swings have only added to the turbulence, reshaping contracts and global trade dynamics. Brazil remains, without doubt, the heartbeat of the coffee industry, especially as we anticipate the results of the Brazil Coffee Harvest 2025/2026.

Harvest Progress and Outlook

By the end of August, Brazil’s 2025 harvest was virtually complete, with 100% of robusta and 98% of arabica collected. Rainfall—up to 50mm in arabica areas and 30mm in robusta regions—did little to damage bean development. Average bean size is larger than last year, and mild winter conditions extended the processing season, allowing more washed and semi-washed coffees to enter the market. Light frosts in June caused only localized impact, with no major losses.

The 2025/26 crop is now projected at 62.3 million bags—down 3.4% from earlier estimates and 5.4% compared to last year. Arabica is expected at 36.5 million bags, a sharp decline of 18.4% year-on-year, while robusta will rise to 25.8 million bags, a gain of nearly 22%. Strong vegetation growth after harvest suggests excellent potential for the 2026/27 cycle, with nurseries already sold out and farmers reinvesting in renewal and expansion. Notably, Brazil Coffee Harvest 2025/2026 will be closely watched for its impact on these numbers and future cycles.

Regional Insights

South Minas Gerais, the world’s largest coffee region with 500,000 hectares under cultivation, continues to showcase both challenges and innovation. Cities like Varginha, Três Pontas, Poços de Caldas, and Guaxupé remain central hubs. While productivity averages 25 bags per hectare, EFICO’s field visits revealed stark differences between farms. Yet one constant was clear: investment in innovation, from modern warehouses to irrigation projects that allow precise fertilization and improved yields. As a result, Brazil Coffee Harvest 2025/2026 outcomes will be partially driven by the ongoing modernization in these regions.

The Cerrado, often referred to by EFICO Brazil director João Marcos Crespo as “The Factory,” demonstrates a more industrialized approach. With 250,000 hectares—more than half irrigated—its productivity averages 35 bags per hectare, producing nearly 6 million bags annually. Regenerative agriculture is widely adopted here, both for cost savings and soil health. Farmers are also installing new high-capacity mechanical dryers, doubling efficiency compared to traditional models.

Market Dynamics

Despite decent production levels, commercialization has slowed to its lowest point in five years. Producers are financially stable and releasing coffee in small volumes, waiting for favorable prices. The introduction of a 50% U.S. import duty on Brazilian coffee in August has added further uncertainty to the market. Exporters are now carefully balancing procurement and sales strategies while watching international flows closely.

Overall, Brazil’s 2025 harvest stands between 60 and 62 million bags. While arabica output has dropped, robusta is filling part of the gap, and investments in quality continue to push screen sizes above last year’s levels. Market volatility is expected to persist at least through October, as the flowering season and rainfall patterns will set the tone for the 2026 crop.

Final Note

From the innovation-driven Cerrado to the tradition-rich farms of South Minas, Brazil’s coffee sector remains both resilient and deeply influential. As the new harvest begins arriving in early October, one thing is certain: when Brazil sneezes, the entire coffee world feels it. Ultimately, only time will reveal the full implications of the Brazil Coffee Harvest 2025/2026 for the global industry.

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.