Tag: ICE coffee inventories

Strong Dollar Weighs on Coffee Prices

Posted on by Qahwa World
Dubai – Qahwa World

Coffee futures closed lower on Tuesday as a stronger U.S. dollar pressured commodity markets. This is a clear example of how a Strong Dollar Weighs on Coffee Prices. July arabica coffee contracts (KCN26) fell 0.76%, while July robusta futures (RMN26) declined 0.63%.

Losses were limited by tightening certified coffee inventories. ICE arabica stocks dropped to a 2.5-month low of 471,831 bags, while robusta inventories fell to a two-year low of 3,664 lots.

The ongoing closure of the Strait of Hormuz continued to disrupt global coffee trade flows, increasing shipping, insurance, fuel, and fertilizer costs for importers and roasters.

Brazil’s weaker export performance also supported prices. Cecafe reported that Brazil’s March green coffee exports declined 10% year-on-year to 2.65 million bags, while the country’s Trade Ministry said total March coffee exports fell 31% to 151,000 metric tons.

Meanwhile, rising supplies from Vietnam weighed on robusta prices. Vietnam’s coffee exports during January–April 2026 increased 15.8% year-on-year to 810,000 metric tons, according to the National Statistics Office. The country’s 2025/26 coffee production is expected to rise 6% to a four-year high of 1.76 million metric tons.

Expectations of a larger Brazilian crop also added bearish pressure. Recent forecasts from the Coffee Trading Academy, Marex Group, Sucafina, and StoneX all point to strong production in Brazil’s 2026/27 season, with estimates ranging from 71.4 million to 75.9 million bags.

StoneX also expects the global coffee surplus to expand to 10 million bags in 2026, compared with 1.8 million bags in 2025.

The USDA’s Foreign Agricultural Service forecasts global coffee production in 2025/26 will reach a record 178.848 million bags, driven by stronger robusta output, while global ending stocks are projected to decline 5.4% to 20.148 million bags.

Coffee Prices Rise as Brazilian Real Strengthens and Supply Risks Grow

Posted on by Qahwa World

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.

Easing Weather Threats in Brazil and Vietnam Weigh on Coffee Prices

Posted on by Qahwa World

Dubai – Qahwa World

Coffee prices dropped sharply on Thursday after giving up early gains, with December Arabica down 2.54% and November Robusta falling 3.9%.

The decline came as weather conditions improved in two of the world’s largest coffee-producing countries. Forecasts from Brazil’s Climatempo predicted weekend rains across the coffee-growing regions, while Vietnam’s weather office reduced the likelihood of heavy rainfall from Tropical Storm Fengshen over the Central Highlands—its main coffee belt—lessening the risk of crop damage.

In Brazil, prices had earlier rallied on concerns over severe drought during the flowering phase of coffee trees, which is critical for the 2026/27 harvest. The state of Minas Gerais, the country’s largest Arabica-producing region, received only about 70% of its average rainfall in the past month.

In contrast, Robusta prices faced downward pressure following data from Vietnam’s National Statistics Office showing that the country’s coffee exports from January to September 2025 rose +10.9% year-on-year to 1.23 MMT. Production for 2025/26 is forecast to rise +6% to 1.76 MMT (approximately 29.4 million bags), the highest level in four years.

Lower inventories on the Intercontinental Exchange (ICE) provided only partial support. ICE-monitored Arabica stocks fell to a 19-month low of 465,910 bags, while Robusta stocks hit a 3-month low of 6,141 lots.

Optimism surrounding trade talks between the United States and Brazil also weighed on prices. Reports suggest discussions may lead to the removal of the 50% tariffs currently imposed on Brazilian imports, a move that could ease supply constraints in the U.S. market.

Meanwhile, International Coffee Organization (ICO) data showed that global coffee exports for the current 2024/25 season (October–August) rose +0.2% to 127.92 million bags, indicating ample supply.

Brazil’s crop forecasting agency Conab lowered its 2025 harvest estimate to 55.2 million bags (-0.9% from May), reducing Arabica output to 35.2 million bags (-4.9%).

According to the U.S. Department of Agriculture (USDA), global coffee production in 2025/26 is expected to rise +2.5% to a record 178.68 million bags, driven by a +7.9% increase in Robusta to 81.65 million bags, despite a -1.7% decline in Arabica output.

Trading company Volcafe projects a global Arabica deficit of 8.5 million bags for 2025/26—wider than the 5.5 million-bag shortfall recorded in 2024/25 and marking the fifth consecutive year of supply deficits.

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.

Coffee Prices Soar to New 2-Month Highs Amid Brazil Frost and Falling Exports

Posted on by Qahwa World

Dubai, August 16, 2025 (Qahwa World) – Coffee prices surged to their highest levels in two months on Friday, driven by frost concerns in Brazil, declining exports, and tightening global inventories. The rally pushed September Arabica coffee (KCU25) up 4.64% to close at +15.15, while September Robusta coffee (RMU25) gained 2.86% at +117. Over the week, Arabica rose +10.4% and Robusta +18%, marking one of the strongest weekly rallies of the year.

Brazil Frost Sparks Market Tensions

Early this week, a light frost was reported in Cerrado Mineiro, one of Brazil’s key Arabica-producing regions. While crop damage was limited, the event renewed market fears over frost risks during Brazil’s winter season. Weather events in Brazil remain a critical factor in global coffee price volatility.

Sharp Decline in Brazilian Exports

Brazil, the world’s largest coffee exporter, reported a 20.4% year-on-year drop in July unroasted coffee exports to 161,000 MT, according to its Trade Ministry. Exporter group Cecafe confirmed a steep decline, with green coffee exports down 28% y/y to 2.4 million bags. Within this, Arabica exports fell -21%, while Robusta exports plunged -49%.
From January to July, Brazil shipped 22.2 million bags, down -21% compared with last year.

Inventories at Multi-Year Lows

Declining ICE warehouse stocks further fueled bullish momentum. Arabica inventories hit a 1.25-year low of 726,661 bags on Thursday before rebounding slightly to 731,739 on Friday. Robusta inventories fell to a three-week low of 6,907 lots, below the recent two-year high of 7,029 lots reached in late July.

U.S. Tariffs Add Uncertainty

The market is awaiting clarity on U.S. trade policy, as President Trump has yet to exempt coffee from the proposed 50% tariff on Brazilian exports. Such a move could raise domestic inventories in Brazil while reshaping global trade flows.

Weather and Harvest Update

Above-average rainfall in Minas Gerais, Brazil’s largest Arabica region, brought 4.8 mm of precipitation last week, or 109% of the historical average, easing dryness concerns but weighing slightly on prices.
Meanwhile, Brazil’s 2025/26 harvest is nearing completion. Safras & Mercado reported 94% progress as of August 6, ahead of last year’s 92%. Cooxupe, Brazil’s largest cooperative, said its members had completed 80.4% of the harvest by August 8.

Global Coffee Exports and Vietnam Outlook

On the supply side, the International Coffee Organization (ICO) noted that global coffee exports rose +7.3% y/y in June to 11.69 million bags. However, cumulative exports from October to June dipped slightly by -0.2% y/y at 104.14 million bags.

Vietnam, the world’s second-largest producer, continues to face challenges. The country’s 2023/24 output fell 20% y/y to 1.472 million MT, the lowest in four years, due to drought. Exports in 2024 dropped -17.1% to 1.35 million MT. However, from January to July 2025, Vietnam’s shipments rose 6.9% y/y to 1.05 million MT, offering partial recovery.

USDA and Volcafe Projections

The USDA’s Foreign Agriculture Service (FAS) expects world coffee production to hit a record 178.68 million bags in 2025/26, up 2.5% year-on-year. Robusta output is forecast to surge by +7.9% to 81.65 million bags, while Arabica is projected to decline -1.7% to 97.02 million bags.
Despite this, Volcafe projects a widening global Arabica deficit of -8.5 million bags for 2025/26 – the fifth straight year of supply shortfalls – compared with a -5.5 million bag deficit last season.