Tag: Cooxupe

Coffee Prices Plunge on Rain Forecasts for Brazil

Posted on by Qahwa World

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.

Arabica Coffee Slips as Brazil’s Harvest Nears Completion

Posted on by Qahwa World

Dubai, August 27, 2025 (Qahwa World) – Arabica coffee futures fell on Tuesday as pressure from Brazil’s near-complete harvest weighed on the market, while robusta prices gained on tightening supply signals. On the ICE exchange, December arabica coffee (KCZ25) closed down 1.44% at -5.45, while November robusta (RMU25) climbed 0.86% (+40). The divergence reflects the complex forces shaping global coffee markets at the end of August.

Brazil’s influential Cooxupé cooperative announced that as of August 22, its members had completed 91.3% of their 2025/26 harvest, signaling an abundant flow of fresh beans into the market. Independent consultancy Safras & Mercado reported even higher progress, noting 99% of Brazil’s harvest complete, including 100% of robusta and 98% of arabica. Such rapid progress has increased selling pressure, pushing arabica futures lower despite ongoing concerns about weather damage in Minas Gerais, the country’s top arabica-growing region. Somar Meteorologia reported no rainfall in the week ending August 23, following frost damage earlier in the month.

Counterbalancing the harvest pressure, exchange-monitored stocks remain tight. ICE arabica inventories dropped to a 1.25-year low of 717,113 bags, while robusta inventories fell to a one-month low of 6,614 lots, underpinning prices. Additional upward pressure stems from U.S. market disruptions, where buyers are canceling contracts for Brazilian coffee following the imposition of 50% tariffs on Brazilian exports. With Brazil supplying nearly one-third of unroasted beans to the U.S., the restrictions are tightening American supplies.

Brazil’s July export data highlighted another bullish element. The Trade Ministry reported a 20.4% year-on-year decline in unroasted coffee exports to 161,000 metric tons. Exporter group Cecafé confirmed the trend, citing a 28% fall in green coffee exports to 2.4 million bags. Arabica shipments dropped 21%, while robusta exports plunged 49% compared to July 2024. For the first seven months of 2025, Cecafé recorded a 21% decline in Brazil’s overall coffee exports, totaling 22.2 million bags.

Global indicators, however, showed a mixed picture. The International Coffee Organization reported that global June exports rose 7.3% year-on-year, reaching 11.69 million bags, although October–June cumulative exports slipped slightly by 0.2%. In Vietnam, drought weighed heavily on 2023/24 production, which fell 20% to 1.47 million metric tons, the smallest crop in four years. Exports also slumped 17% in 2024, though this year’s January–July shipments rose 6.9%.

Looking ahead, the USDA’s Foreign Agricultural Service projects record global coffee production in 2025/26 at 178.68 million bags, led by a 7.9% increase in robusta output. Arabica production, however, is expected to decline by 1.7% to 97 million bags. Despite this, traders remain cautious, as Volcafé forecasts an arabica deficit of 8.5 million bags in 2025/26, marking the fifth consecutive year of supply shortfalls, compared with a 5.5 million bag deficit in the current cycle.