Tag: ICE inventories

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.

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.

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 as ICE Inventories Hit Multi-Year Lows

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Dubai, August 27, 2025 (Qahwa World) – Coffee markets staged a sharp turnaround by Wednesday’s close, with both arabica and robusta futures rallying strongly as dwindling ICE inventories and tightening export flows outweighed harvest pressure from Brazil. The rebound highlights the volatility gripping global coffee trade, where supply constraints and policy shifts continue to drive rapid intraday price swings.

On the ICE exchange, December arabica coffee (KCZ25) jumped +13.00 (+3.49%), while November robusta (RMX25) surged +188 (+4.01%), with robusta touching a three-month high. The rally came just hours after arabica futures had slipped on harvest pressure, underscoring how quickly sentiment is shifting.

ICE-monitored stocks remain a key bullish driver. Arabica inventories fell to a 1.25-year low of 716,578 bags, while robusta dropped to a one-month low of 6,611 lots. Traders say the tightening certified stockpiles are providing strong underlying support, particularly for robusta. At the same time, Brazil’s harvest is almost complete. Cooxupé, the country’s largest cooperative, reported members were 91.3% finished by August 22, while Safras & Mercado estimated 99% of the crop complete, with robusta fully harvested and arabica at 98%. This progress has been weighing on prices, yet the bullish impact of falling inventories and weaker exports is increasingly dominant.

July export figures underline this trend. Brazil’s Trade Ministry reported a 20.4% year-on-year decline in unroasted coffee exports, totaling 161,000 metric tons. Cecafé confirmed a broader contraction, citing a 28% fall in green coffee exports to 2.4 million bags. Arabica exports dropped 21%, while robusta plunged 49%. Shipments for the first seven months of 2025 are down 21% at 22.2 million bags.

Outside Brazil, fundamentals remain tight. Vietnam’s 2023/24 crop fell 20% year-on-year to 1.47 million metric tons due to drought, the smallest in four years. Exports in 2024 declined 17%, though shipments this year have rebounded, rising 6.9% between January and July. At the global level, the International Coffee Organization (ICO) reported June exports up 7.3% year-on-year to 11.69 million bags, though cumulative shipments since October are slightly lower at -0.2%.

Looking ahead, the USDA’s Foreign Agricultural Service (FAS) projects record global production of 178.68 million bags in 2025/26, driven by robusta’s 7.9% expansion. Arabica output is expected to contract by 1.7% to 97 million bags. Despite this, Volcafé forecasts a deepening arabica deficit of 8.5 million bags, widening from this year’s 5.5 million, marking the fifth consecutive annual shortfall.

The market’s day-to-day volatility highlights the tension between short-term harvest pressure and long-term structural supply constraints. With U.S. buyers canceling contracts following 50% tariffs on Brazilian coffee, and inventories at multi-year lows, analysts warn the coming months could bring continued turbulence for global coffee prices.

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.