Tag: Vietnam coffee production

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 Continue to Rise as Global Supplies Decline

Posted on by Qahwa World

Dubai, 4 September 2025 (Qahwa World) – Coffee prices closed higher on Wednesday amid tightening global supplies, with both arabica and robusta contracts gaining momentum. December arabica futures (KCZ25) rose by +3.30 cents (+0.89%), while November robusta (RMX25) advanced by +55 USD (+1.25%), bouncing back from a recent 1.5-week low.

The International Coffee Organization (ICO) reported that global coffee exports in July dropped -1.6% year-on-year to 11.6 million bags, while cumulative exports for October to July slipped -0.3% to 115.6 million bags. This contraction, combined with falling exchange-monitored inventories, supported the market. ICE-monitored robusta inventories fell to a 1-month low of 6,552 lots, while arabica stocks declined to a 1.25-year low of 686,863 bags.

Concerns about tighter U.S. coffee supplies also added support, as American buyers canceled contracts for Brazilian coffee following the 50% tariffs imposed on Brazilian exports to the U.S. Since Brazil supplies about a third of unroasted coffee to the American market, the move is further tightening availability.

In Brazil, above-average rainfall has eased crop concerns ahead of the crucial flowering period. Somar Meteorologia reported that Minas Gerais, the country’s largest arabica-growing area, received 163% of the historical average rainfall during the last week of August. Meanwhile, the harvest is nearly complete, with Cooxupé, Brazil’s largest cooperative, announcing that 94.9% of its members’ harvest was done by August 29, while Safras & Mercado estimated the national harvest at 99% complete as of August 20. Despite this, export data reflects a slowdown, with Brazil’s Ministry of Trade reporting that July unroasted coffee exports plunged -20.4% y/y to 161,000 MT, and exporter group Cecafé noting that green coffee shipments fell -28% y/y to 2.4 million bags, including a -49% drop in robusta exports.

Vietnam, the world’s leading robusta producer, continues to face drought-related challenges. Production for the 2023/24 crop fell -20% y/y to 1.47 MMT, the smallest in four years, while 2024 exports declined -17.1% y/y to 1.35 MMT. The Vietnam Coffee and Cocoa Association has revised its 2024/25 production outlook downward to 26.5 million bags, though the National Statistics Office reported a +6.9% y/y increase in January–July 2025 exports, reaching 1.05 MMT.

Looking ahead, the USDA’s Foreign Agriculture Service projects that world coffee production in 2025/26 will climb +2.5% y/y to a record 178.7 million bags. This includes a -1.7% decline in arabica output to 97 million bags and a +7.9% increase in robusta to 81.6 million bags, with ending stocks expected to rise +4.9% to 22.8 million bags. However, trader Volcafé forecasts a global arabica deficit of -8.5 million bags for 2025/26, deeper than the -5.5 million bag deficit recorded in 2024/25, marking the fifth consecutive year of arabica shortfalls despite stronger robusta production.

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.