Tag: Vietnam Coffee

Coffee Prices Slide on Improved Supply Outlook

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Coffee prices extended their week-long decline on Wednesday, pressured by signs of improving global supply. March arabica coffee (KCH26) closed down 8.45 cents (-2.66%), while March ICE robusta coffee (RMH26) fell 49 points (-1.29%).

Arabica prices dropped to a 5.75-month low, and robusta touched a six-week low. The market has been weighed down by favourable weather and rising production expectations, particularly in Brazil and Vietnam.

Above-average rainfall in Brazil has eased concerns about dryness in key growing regions. Somar Meteorologia reported that Minas Gerais—the country’s largest Arabica-producing state—received 69.8 mm of rain in the week ended January 30, or 117% of the historical average.

Brazil’s supply outlook also turned more bearish after Conab, the country’s crop forecasting agency, raised its 2025 coffee production estimate by 2.4% to 56.54 million bags, up from 55.20 million bags projected in September.

Robusta prices have been further pressured by strong export and production prospects in Vietnam, the world’s largest robusta producer. Vietnam’s National Statistics Office reported that 2025 coffee exports rose 17.5% year over year to 1.58 million metric tonnes. Meanwhile, Vietnam’s 2025/26 coffee production is projected to increase 6% year over year to 1.76 million metric tonnes (29.4 million bags), a four-year high. The Vietnam Coffee and Cocoa Association has also said output could rise 10% from the previous season if weather conditions remain favourable.

Rising exchange inventories have added to bearish sentiment. ICE-monitored Arabica inventories rebounded to 461,829 bags on January 7, a 3.25-month high, after falling to a 1.75-year low in mid-November. ICE robusta inventories also recovered, climbing to a two-month high of 4,662 lots after reaching a 13-month low in December.

Some factors have provided limited support. Brazil’s coffee exports declined sharply in December, according to Cecafe. Total green coffee exports fell 18.4% year over year to 2.86 million bags, with Arabica exports down 10% and Robusta exports down 61%.

The International Coffee Organization reported that global coffee exports for the current October–September marketing year slipped 0.3% year over year to 138.66 million bags, signalling tighter trade flows.

Looking ahead, the USDA’s Foreign Agriculture Service projects global coffee production in 2025/26 will rise 2.0% year over year to a record 178.85 million bags. Arabica production is forecast to fall 4.7% to 95.52 million bags, while robusta output is expected to jump 10.9% to 83.33 million bags. Brazil’s production is projected to decline 3.1% to 63 million bags, while Vietnam’s output is forecast to rise 6.2% to a four-year high of 30.8 million bags. Global ending stocks are expected to fall 5.4% to 20.15 million bags.

Coffee Prices Rise as Dollar Weakens

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Coffee futures ended higher on Friday, with robusta reaching a 1.5-month high, as the U.S. dollar fell to its lowest level in three and a half months. March arabica (KCH26) increased by 0.92%, while March robusta (RMH26) gained 2.88%. The weaker dollar prompted short-covering across commodities, including coffee.

Brazilian coffee exports have declined, supporting prices. Cecafe reported that December’s total green coffee exports fell 18.4% year-on-year to 2.86 million bags. Arabica shipments dropped 10% to 2.6 million bags, while robusta exports plunged 61% to 222,147 bags. Below-average rainfall in Minas Gerais, Brazil’s largest arabica-growing region, also added upward pressure, with Somar Meteorologia reporting only 33.9 mm of rain for the week ending January 16, just 53% of the historical average.

At the same time, inventories monitored by ICE have rebounded, putting some pressure on prices. Arabica stocks rose to a 2.5-month high of 461,829 bags, after reaching a 1.75-year low in November. Robusta inventories recovered to a 1.75-month high of 4,609 lots, following a 1-year low in December.

Global supply trends remain mixed. Brazil’s crop agency Conab raised its estimate for 2025 coffee production by 2.4% to 56.54 million bags. Vietnam, the world’s largest robusta producer, reported a 17.5% year-on-year increase in coffee exports for 2025, reaching 1.58 million metric tons. Its coffee output is projected to rise 6% to 29.4 million bags, marking a four-year high.

Overall, global coffee production is expected to grow, with USDA forecasts projecting a 2% increase in 2025/26 to a record 178.85 million bags. Arabica output is anticipated to fall 4.7% to 95.52 million bags, while robusta production is expected to climb 10.9% to 83.33 million bags. Brazil’s output is forecasted to decline 3.1% to 63 million bags, while Vietnam’s is projected to rise 6.2% to 30.8 million bags. Ending stocks are expected to drop 5.4% to 20.15 million bags.

The coffee market is navigating a mix of forces: a weaker dollar and tight Brazilian exports support prices, while recovering inventories and record Vietnamese production weigh on the market. Traders and industry observers will continue watching weather conditions, export flows, and inventory levels closely as the year progresses.

Coffee Prices Rise on Brazil Dryness and Global Supply Dynamics

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Coffee markets moved higher today amid ongoing concerns over dry conditions in Brazil, the world’s largest arabica producer. March arabica futures (KCH26) rose +4.20 (+1.18%), while March robusta futures (RMH26) gained +36 (+0.92%).

The price gains follow last week’s rally, when arabica hit a one-month high due to below-average rainfall in Brazil. Somar Meteorologia reported that Minas Gerais, Brazil’s primary arabica-growing region, received just 26.5 mm of rain for the week ending January 9—only 29% of the historical average—raising fears of smaller harvests.

  • Inventory Levels Support Prices

Tighter stock levels are adding upward pressure on coffee prices. ICE-tracked arabica inventories fell to a 1.75-year low of 398,645 bags on November 20 but rebounded to 461,829 bags last Wednesday. ICE robusta inventories hit a one-year low of 4,012 lots on December 10, later rising to a five-week high of 4,278 lots.

  • Vietnam Exports and Global Supply Trends

While Brazilian dryness is bullish, rising robusta exports from Vietnam are weighing on prices. Vietnam exported 1.58 million metric tons of coffee in 2025, up 17.5% from the previous year. Vietnam’s 2025/26 coffee production is expected to reach 1.76 million metric tons (29.4 million bags), a four-year high. The Vietnam Coffee and Cocoa Association noted that output could increase 10% over the prior year if favorable weather continues.

Globally, coffee supplies are showing mixed signals. The International Coffee Organization reported a slight year-on-year decline in exports for the current marketing year (October–September), totaling 138.658 million bags. Meanwhile, the USDA’s Foreign Agricultural Service (FAS) projects world coffee production in 2025/26 will hit a record 178.848 million bags, with arabica decreasing 4.7% to 95.515 million bags and robusta rising 10.9% to 83.333 million bags. Brazil’s production is expected to fall 3.1% to 63 million bags, while Vietnam’s output may climb 6.2% to 30.8 million bags. Ending stocks are projected to drop 5.4% to 20.148 million bags.

  • Outlook

Market watchers are balancing the bullish signals from Brazil’s dry weather and shrinking inventories against the bearish influence of rising Vietnamese supplies and higher global production forecasts. The net effect has been steady upward pressure on coffee prices, with both arabica and robusta futures posting notable gains in recent sessions.

The Fragrant Coffee Season in Khe Sanh and Huong Phung

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Starting every November, the coffee cherries in Quang Tri’s highlands reach full ripeness. On the rolling hills of Khe Sanh and Huong Phung, bright red Arabica cherries quietly release their rich aroma under the warm sunlight and gentle mountain winds, following the steps of local farmers from their fields to the villages. Each smile of a coffee picker captures a moment of the harvest season, where land, people, and coffee beans come together, telling a gentle story of a region growing stronger through its own fragrant bounty.

Lê Thị Phương Nhi, founder of BruLe Coffee, shared that 2025 was an exceptional year for Khe Sanh and Huong Phung coffee. Harvests were abundant, prices reached record highs, and yields were impressive—some areas produced as much as 25 tons per hectare.

In Xa Ry, coffee is gradually being cultivated organically, transforming from a common crop into a specialty product. This shift has significantly increased farmers’ income, with fresh coffee achieving the highest prices ever recorded, motivating further investments in quality and production expansion.

As the year draws to a close, coffee harvesting becomes a bustling activity across the coffee-growing communes of southwest Quang Tri. Nearly 4,000 hectares of coffee are in full production, and farmers are enthusiastic because this season offers the best yield and prices they have ever seen.

Phan Ngọc Long, Vice Chairman of Huong Phung Commune, reported that the commune has about 2,100 hectares of coffee ready for harvest. Average yields range from 8–10 tons of fresh cherries per hectare, with well-managed farms producing 15–20 tons per hectare. Coffee prices have soared to 24,000–27,000 VND per kilogram, enabling farmers to earn a net profit of 14,000–17,000 VND per kilogram after labor and other costs.

This year’s harvest also provides employment for thousands of seasonal workers, mainly from ethnic minority communities such as Van Kieu and Pa Ko. Daily wages range from 300,000–400,000 VND, giving workers stable income and improving livelihoods, especially at the end of the year.

Local authorities support farmers through marketing partnerships, ensuring transparency in quality and pricing, and preventing fraud. In the fields, the pride of women carefully tending specialty coffee beans is visible in every smile. Coffee cherries are meticulously sorted to ensure premium quality from the very first step.

Huong Phung Arabica is processed through strict procedures: from initial sorting, drying in solar greenhouses, to roasting with modern machinery. Each stage requires precision to preserve the coffee’s elegant aroma, mild acidity, and characteristic sweet finish. Roasted beans emit a captivating fragrance—a harmonious result of earth, climate, and human hands.

This is the unique taste of Huong Phung and Quang Tri, steadily claiming its place on Vietnam’s specialty coffee map.

Khe Sanh and Huong Phung coffee did not reach this success overnight. In previous years, low prices forced many farmers to abandon or replace coffee crops. Between 2010–2015, substantial areas of coffee were cleared for other plants. Today, specialty coffee provides sustainable livelihoods and creates a new path toward green agriculture.

Khe Sanh is no longer just remembered for its turbulent past; it is now recognized as the cradle of Central Vietnam’s Arabica specialty coffee. On hills over 500 meters above sea level, in a year-round mild climate, coffee trees thrive, carrying the aspirations of local highland communities.

Harvesting is done manually with careful selection, ensuring only perfectly ripe cherries are picked—a key factor in producing specialty coffee. According to Lương Thị Ngọc Trâm from Pun Coffee Co., Khe Sanh and Huong Phung’s natural conditions favor Arabica and Catimor varieties. Despite the basin-like terrain not being ideal, the wide day-night temperature difference of 7–9°C allows Arabica to thrive, creating Vietnam’s most distinctive coffee. The tropical monsoon climate, average temperature of 22°C, annual rainfall of 2,262mm, and abundant water resources from lakes, rivers, and streams contribute to high yields and quality.

To promote high-quality Vietnamese coffee globally, the Ministry of Agriculture and Rural Development approved the Vietnam Specialty Coffee Development Project (2021–2030), including Quang Tri. Coffee acreage in the province is projected to expand from 11,500 hectares (2021–2025) to 19,000 hectares (2026–2030), representing a growing share of national production.

During harvest season, the hills of Khe Sanh and Huong Phung come alive with activity. Women in traditional Van Kieu and Pa Ko attire carefully pick the bright red cherries. Handpicking and meticulous selection are crucial steps in producing specialty coffee.

Today, Khe Sanh and Huong Phung coffee is more than an agricultural product—it symbolizes revival, resilience, and the determined spirit of a community rising from a land once scarred by hardship. Among the fragrant hills, Arabica beans narrate a story of Quang Tri: a story of land, people, and a sustainable, hopeful future.

Coffee Prices Retreat as Stronger Dollar Triggers Selling

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Coffee futures ended lower on Thursday after surrendering earlier gains, pressured by a strengthening U.S. dollar that prompted investors to reduce long positions.

March arabica coffee futures declined about 0.8%, while March robusta futures slipped slightly, losing roughly 0.3% by the close.

The pullback came as the U.S. Dollar Index climbed to its highest level in four weeks, making dollar-denominated commodities like coffee less attractive to buyers. This currency move outweighed earlier support that had pushed arabica prices to a one-month high.

Earlier in the session, coffee prices found strength from weather concerns in Brazil. Rainfall in key growing areas remained below normal, particularly in Minas Gerais, the country’s largest arabica-producing region. Weekly precipitation there reached just under two-thirds of the historical average, renewing worries about crop development.

Robusta prices, however, continued to face headwinds from expanding supplies in Vietnam. The country reported a sharp increase in coffee exports for 2025, reflecting strong output from the world’s leading robusta producer.

Inventory trends offered mixed signals. Exchange-tracked arabica stocks, while still relatively low, have rebounded from recent multi-year lows. Robusta inventories also recovered modestly after hitting their weakest levels in over a year.

Trade flows have also influenced the market. Earlier U.S. tariffs reduced American purchases of Brazilian coffee during late summer and early autumn, sharply cutting imports during that period. Although tariffs have since been reduced, U.S. coffee supplies remain tight.

On the supply side, expectations of ample global production continue to weigh on prices. Brazil’s crop agency recently revised its 2025 coffee output forecast higher, while Vietnam is projected to harvest one of its largest crops in several years if favorable weather persists.

That said, some longer-term data point to tightening conditions. Global coffee exports edged lower in the current marketing year, according to international industry figures.

Looking ahead, the USDA projects world coffee production to reach a record level in the 2025/26 season, driven by strong growth in robusta output that offsets a decline in arabica production. Ending global stocks are expected to fall, suggesting that while near-term supply is ample, the balance could tighten further down the road.

How Vietnam Turned Coffee Into a Way of Life?

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National Geographic has published an in-depth report examining Vietnam’s coffee culture, describing it as one of the most dynamic and inventive in the world—where a once-colonial crop has evolved into a powerful symbol of identity, community, and creativity.

According to the magazine, coffee in Vietnam is far more than a daily stimulant. While many cultures consume coffee quickly or in passing, Vietnamese coffee is typically enjoyed slowly, in social settings that encourage conversation, reflection, and a shared sense of place.

From Colonial Introduction to Global Powerhouse

As reported by National Geographic, coffee was first introduced to Vietnam in 1857 by French missionaries. Early cultivation focused on Arabica beans, which struggled in the country’s climate. Farmers eventually shifted to Robusta, a hardier variety that thrived in the Central Highlands and southern regions.

Following the Vietnam War, coffee became a cornerstone of the country’s economic recovery. Government investment in the 1980s helped transform Vietnam into a major producer, and today it stands as the world’s second-largest coffee exporter after Brazil, the magazine notes.

Innovation Shaped by Scarcity

The report highlights how periods of scarcity fueled Vietnam’s most distinctive coffee traditions. During the 1940s, when fresh milk was difficult to obtain, condensed milk became a staple ingredient. The same era saw the creation of Vietnam’s iconic egg coffee, made by whisking egg yolks with sugar into a rich, creamy topping.

National Geographic also points to the phin filter—a simple metal brewing device—as a defining feature of Vietnamese coffee culture, producing a bold, concentrated brew that reflects both practicality and craftsmanship. Coconut coffee, meanwhile, emerged from the country’s abundance of tropical resources.

Coffee as a Social Ritual

According to voices cited by National Geographic, coffee in Vietnam functions as a social rhythm rather than a rushed habit. From street-side stools in Ho Chi Minh City to neighborhood cafés in Hanoi, coffee drinking is deeply embedded in everyday life.

The magazine reports that this communal approach has increasingly attracted travelers, while younger generations of Vietnamese entrepreneurs are reshaping the industry—focusing on quality, traceability, and thoughtful café experiences that elevate local beans to global standards.

A New Era of Coffee Experiences

National Geographic notes that cities such as Hanoi, Da Nang, and Hoi An now offer a wide spectrum of coffee experiences. Traditional cafés coexist with specialty shops, luxury hotels, and curated tasting programs that introduce visitors to Vietnam’s diverse coffee terroirs.

The report also highlights the growing presence of coffee-based cocktails and modern mixology, where Vietnamese Robusta beans are used to add depth and structure to innovative drinks, reflecting the country’s evolving culinary creativity.

A Living Cultural Legacy

In conclusion, National Geographic emphasizes that Vietnam’s relationship with coffee mirrors the nation’s broader history—shaped by colonial influence, hardship, and adaptation, yet ultimately defined by ownership and pride.

As the magazine observes, drinking Vietnamese coffee today is not simply about flavor, but about experiencing a collective memory of resilience, reinvention, and hope.

Coffee Prices Find Support Amid Indonesian Flooding

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Global coffee prices showed mixed movement on Tuesday, with market sentiment shaped by supply concerns in Southeast Asia and updated production forecasts from major producing countries.

Arabica coffee futures for March delivery edged lower, while robusta contracts for January moved higher. The divergence reflects differing supply dynamics for the two varieties.

Prices have received support from extensive flooding in Indonesia, a key coffee producer. Recent reports indicate that floodwaters have affected roughly one-third of arabica coffee farms in northern Sumatra. Robusta-growing areas, however, appear to have suffered less damage, limiting the overall impact on Indonesia’s export capacity.

Weather developments in Brazil also influenced the market. According to Somar Meteorologia, Minas Gerais — the country’s largest arabica-producing region — recorded 38.3 millimeters of rainfall during the week ending December 19. This amount represents approximately 76% of the historical weekly average, easing concerns about drought stress in key growing zones.

Despite these supportive factors, expectations of ample global supply continue to weigh on prices. Brazil’s agricultural forecasting agency revised its 2025 coffee production estimate upward in early December, projecting total output at 56.54 million bags, compared with a previous estimate of 55.20 million bags.

Robusta prices remain under pressure due to strong export flows from Vietnam. Official statistics showed that Vietnam’s coffee exports surged sharply in November, with shipments rising significantly compared to the same month last year. Cumulative exports for the January–November period also posted strong year-on-year growth.

Arabica prices, meanwhile, found some support from lower Brazilian export volumes. Data from Brazil’s coffee exporters association indicated a notable decline in green coffee exports in November compared with the same period last year.

Inventory levels on ICE exchanges have also played a role in recent price movements. Certified arabica stocks fell to their lowest level in more than a year in late November before rebounding in December. Robusta inventories followed a similar pattern, declining to multi-month lows earlier in the month and then partially recovering.

Trade flows to the United States added another layer of complexity. Purchases of Brazilian coffee by U.S. buyers dropped sharply during the period when higher tariffs were in place earlier in the year. Although those tariffs have since been reduced, U.S. inventories remain tight following the earlier slowdown in imports.

Looking ahead, rising production in Vietnam is seen as a bearish factor. Forecasts for the 2025/26 season suggest higher output, with industry groups indicating that favorable weather conditions could push production well above last year’s levels. Vietnam remains the world’s leading producer of robusta coffee.

At the global level, some indicators point to tighter supply. The International Coffee Organization recently reported a slight decline in global coffee exports for the current marketing year.

However, longer-term projections suggest overall production growth. The U.S. Department of Agriculture expects global coffee output in the 2025/26 season to reach a record level, driven by increased robusta production, even as arabica output is forecast to decline. Ending stocks are projected to fall compared with the previous season, reflecting ongoing demand and inventory adjustments.

Arabica Coffee Drives Economic Development in Tiengan Ward

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Ward in Son La Province, northern Vietnam, is gradually becoming a center for high-quality Arabica coffee production. Coffee plantations are helping local residents increase their incomes and escape poverty. In 2025, the area is focusing on high-yield varieties, modern technologies, and cooperative farming models.

Just a few minutes from the provincial center, the green and productive Arabica coffee plantations of Tiengan Ward thrive. Thanks to an elevation of over 900 meters above sea level and a mild climate, the local coffee is known for its rich aroma and light acidity, making it suitable for specialty coffee production.

As of 2025, coffee plantations in Tiengan cover more than 350 hectares, with over 80% planted with high-yield Arabica. Yields reach 15–18 tons per hectare, 10–12% higher than during 2020–2023, reflecting changes in approaches to rural economic development.

Nguyen Van Tuan, Chairman of the People’s Committee of Tiengan Ward, Son La Province, stated: “Arabica is regarded as a key crop, with a focus on organic production and the renewal of varieties to improve both quality and local incomes.”

Ka Thi Thuong, the head of Tam Quynh Village in Tiengan Ward, was among the first to successfully switch to high-yield Arabica. She said: “The village covers 772 hectares. On average, about 8 tons of Arabica are harvested per hectare. This year’s yield was particularly high: the majority of families earned more than USD 3,800, while some earned over USD 38,000.”

Beyond Thuong’s family, more than 700 households in Tiengan rely on coffee for income, earning 120–150 million VND annually, contributing significantly to the local economy.

Today, Son La Province is the largest center for Arabica coffee in Vietnam, with over 20,000 hectares of plantations, representing nearly 60% of all Arabica-growing areas in the country. The “Son La Arabica” brand is gradually gaining national recognition, from coffee competitions to exports.

Vuong Van Hai, chairman of the provincial tea association, said:

“Son La focuses on producing high-quality specialty coffee and developing the sector according to geographical indications, while strictly adhering to quality standards and environmental requirements.”

Coffee not only generates income but also drives the development of primary and advanced processing, trade, and agrotourism, creating stable jobs for local residents.

Tiengan Ward aims to build a closed-loop “coffee economy” that combines environmental protection with sustainable development. One of the key initiatives in 2025 is the adoption of modern technologies in coffee cultivation: smart drip irrigation systems, the use of organic biofertilizers, and selective harvesting. These measures help achieve more uniform bean quality, higher sugar content, and consistent flavor.

From the first coffee trees planted on hillside slopes to today, Tiengan Ward is steadily moving toward a more prosperous economic future. Coffee beans have become a symbol of renewed thinking and confidence in modern agricultural development. As local farmers continue to tie their future to Arabica, the story of “prosperity from the mountains” is increasingly visible in the lush greenery of Tiengan’s coffee plantations.

Coffee Prices Drop as Supply Outlook Strengthens

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Coffee prices experienced a sharp decline on Monday, with arabica falling to a two-week low and robusta reaching a 2.25-month low. The downturn comes amid expectations of abundant global coffee supplies.

Brazil’s crop agency, Conab, recently raised its 2025 production forecast to 56.54 million bags, up from 55.20 million bags projected in September. Meanwhile, Vietnam’s National Statistics Office reported a 39% year-on-year increase in November coffee exports, reaching 88,000 metric tons, while January–November exports grew nearly 15% to 1.398 million metric tons.

Analysts at StoneX forecast that Brazil could produce 70.7 million bags in the 2026/27 marketing year, including 47.2 million bags of arabica—a 29% increase compared to the previous year.

The European Union’s recent one-year delay of its deforestation regulation (EUDR) is also influencing market sentiment. The measure, designed to curb deforestation in countries exporting key commodities to the EU, now allows continued imports of coffee, soybeans, and cocoa from regions experiencing deforestation, contributing to expectations of steady supply.

Weather conditions in Brazil are playing a mixed role. In the country’s largest arabica-producing region, Minas Gerais, rainfall was reported at just 11 mm for the week ending December 5, only 17% of the historical average—offering some support for prices.

U.S. coffee inventories monitored by ICE have tightened due to tariffs on Brazilian coffee imports. Arabica stocks fell to a 1.75-year low of 398,645 bags in late November, though they recently rebounded to over 426,000 bags. Robusta stocks dropped to an 11.5-month low on Monday. U.S. purchases of Brazilian coffee from August to October declined 52% year-on-year following the tariff implementation, reducing domestic supply.

On the other hand, increased production from Vietnam exerts downward pressure on prices. The country is expected to produce 1.76 million metric tons (29.4 million bags) in 2025/26, a four-year high, with the Vietnam Coffee and Cocoa Association projecting a 10% increase over the previous crop if favorable weather continues. Vietnam remains the world’s largest robusta producer.

Globally, signs of tighter supplies provide some price support. The International Coffee Organization reported a slight 0.3% year-on-year decline in global coffee exports for the current marketing year, totaling 138.658 million bags.

The USDA projects world coffee production in 2025/26 to reach a record 178.68 million bags, with arabica slightly down 1.7% to 97.022 million bags and robusta rising 7.9% to 81.658 million bags. Brazil’s output is expected to increase modestly to 65 million bags, while Vietnam’s crop could rise to a four-year high of 31 million bags. Global ending stocks are forecast to grow nearly 5% to 22.819 million bags.

Coffee Prices End the Week Higher as the Brazilian Real Strengthens

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March arabica coffee (KCH26) finished Friday’s session up by +1.50 (+0.40%), while January ICE robusta (RMF26) added +26 (+0.57%).

Coffee futures reached their highest levels in a week on Friday, supported by a stronger Brazilian real. As the real (^USDBRL) advanced to a one-week peak against the US dollar, Brazilian growers were less inclined to sell, prompting short covering in the market.

Weather concerns continue to contribute to upward pressure on prices. Arabica markets are receiving support from ongoing dryness in Brazil. Somar Meteorologia reported that Minas Gerais—Brazil’s largest arabica-producing region—recorded 26.4 mm of rainfall in the week ending November 21, representing just 49% of the long-term average. Robusta prices are also firm as forecasts predict heavy rains across Dak Lak in Vietnam, the country’s key coffee-growing province, which are expected to further postpone the current harvest.

Falling ICE coffee stockpiles remain a bullish factor. US tariffs on Brazilian coffee imports have sharply reduced inventories. Arabica stocks monitored by ICE dropped to 398,645 bags last Thursday, the lowest level in 1.75 years, while robusta inventories hit a 6.5-month low of 4,530 lots on Friday. American importers have canceled new orders from Brazil due to tariff pressures, tightening domestic supply. Between August and October—after the tariffs were introduced—US purchases of Brazilian coffee fell by 52% year-on-year to 983,970 bags. Roughly one-third of the coffee imported unroasted into the US typically originates from Brazil.

Last Friday, arabica futures slumped to a 7-week low after President Trump signed an executive order late Thursday removing tariff restrictions on Brazilian food goods, including the 40% levy previously applied to Brazilian coffee.

On the bearish side, StoneX projected last Wednesday that Brazil could produce 70.7 million bags of coffee in the 2026/27 marketing year, including 47.2 million bags of arabica—a 29% increase from the previous year.

Robusta markets also face pressure from expanding supply out of Vietnam. Data from the Vietnam National Statistics Office on November 6 showed that coffee exports for January–October 2025 rose by 13.4% year-on-year to 1.31 million metric tons. Production for the 2025/26 season is expected to grow by 6% year-on-year to 1.76 million metric tons (29.4 million bags), reaching a four-year high. In addition, the Vietnam Coffee and Cocoa Association (Vicofa) stated on October 24 that, provided weather conditions remain favorable, the country’s 2025/26 crop could exceed last year’s output by 10%. Vietnam remains the world’s largest producer of robusta.

Signs of tightening global supply continue to underpin prices. The International Coffee Organization (ICO) reported on November 7 that global coffee exports for the ongoing marketing year (October–September) slipped by 0.3% year-on-year to 138.658 million bags.

Further support emerged after Brazil’s crop agency Conab reduced its 2025 arabica production estimate on September 4. The new estimate stands at 35.2 million bags, down 4.9% from the May forecast of 37.0 million bags. Conab also revised the country’s total 2025 coffee crop downward to 55.2 million bags, compared with the earlier estimate of 55.7 million bags.

According to the USDA’s Foreign Agriculture Service (FAS) outlook released on June 25, global coffee production for 2025/26 is expected to rise by 2.5% year-on-year to a record 178.68 million bags. The report anticipates arabica production will fall by 1.7% to 97.022 million bags, while robusta output will rise 7.9% to 81.658 million bags. FAS also forecasts Brazil’s 2025/26 crop increasing by 0.5% to 65 million bags and Vietnam’s output jumping 6.9% to 31 million bags, marking a four-year high. Ending stocks for 2025/26 are projected to grow by 4.9% to 22.819 million bags, up from 21.752 million bags in 2024/25.

Coffee Prices Settle Lower Despite Inventory Tightness

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Coffee futures closed lower on Wednesday, primarily due to an improved global supply outlook after a key European regulation was delayed. March arabica coffee (KCH26) settled down -3.60 (-0.94%), and January ICE robusta coffee (RMF26) closed down -46 (-1.01%).

The principal downward pressure on coffee prices stemmed from the European Parliament’s approval of a one-year delay to the Deforestation Regulation (EUDR). This regulation, which aims to combat deforestation in countries exporting key commodities like coffee to the EU, will now allow EU countries to continue importing agricultural products from regions in Africa, Indonesia, and South America where deforestation may be occurring. This delay ensures a more ample and continuous flow of global coffee supplies into the European market.

Further reinforcing the bearish outlook are strong production forecasts. StoneX predicted last Wednesday that Brazil’s coffee production for the new 2026/27 marketing year will hit 70.7 million bags, representing a significant year-over-year increase of +29%. Arabica production is specifically forecasted at 47.2 million bags. Signs of increasing robusta supplies are also evident in Vietnam. The country’s Jan-Oct 2025 coffee exports rose +13.4% year-over-year to 1.31 MMT. Furthermore, the 2025/26 coffee production is projected to climb +6% y/y to a four-year high of 29.4 million bags (1.76 MMT), a forecast supported by the Vietnam Coffee and Cocoa Association (Vicofa).

Despite the overall downward movement, losses were limited by several supportive factors, including adverse weather and tightening inventories. Arabica prices found support due to dryness in Brazil’s largest arabica-growing region, Minas Gerais, which received only 49% of its historical average rainfall in the week ended November 21. Robusta prices were also supported by forecasts of heavy showers in Vietnam’s Dak Lak province, which is expected to further delay the harvest in the world’s largest robusta producer.

Shrinking ICE coffee inventories have also been supportive of prices. ICE-monitored arabica inventories fell to a 1.75-year low of 398,645 bags last Thursday, and robusta inventories hit a 6.25-month low on Wednesday. This drawdown has been largely attributed to the previous US tariffs imposed on coffee imports from Brazil, which caused US buyers to void new contracts and tightened US supplies. However, arabica coffee experienced a sharp tumble last Friday after President Trump signed an executive order late Thursday that exempted Brazilian food products, including coffee, from those tariffs, potentially easing supply concerns moving forward.

Finally, there are mixed signals from global supply data. The International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (Oct-Sep) fell slightly by 0.3% y/y to 138.658 million bags, suggesting tighter global supplies recently. The USDA’s Foreign Agriculture Service (FAS) projects world coffee production in 2025/26 to increase by +2.5% y/y to a record 178.68 million bags, but forecasts a -1.7% decrease in arabica production, offering mixed signals.

In summary, the near-term supply outlook, bolstered by the EU regulation delay and massive Brazilian crop forecasts, outweighed the temporary support from weather issues and shrinking inventories, pushing coffee prices lower for the day.

Coffee Prices Plunge as Trump Removes Tariffs on Brazilian Products

Posted on by Qahwa World

Dubai – Qahwa World

On Friday, coffee prices fell sharply, with March arabica futures (KCH26) down 1.91% and January robusta futures (RMF26) falling 2.70%. Arabica reached a seven-week low.

The decline followed an executive order signed by President Trump late Thursday, exempting Brazilian food products from tariffs, including the 40% duty on Brazilian coffee. Prices dropped further after the Brazilian real weakened to a five-week low against the dollar, boosting the competitiveness of Brazilian coffee exports.

Weather factors also influenced the market. Heavy rains are forecast across Brazil’s main coffee-growing regions into next week, which benefits crop development but puts downward pressure on prices.

Robusta prices found some support from Vietnam, where heavy rainfall delayed harvesting in Dak Lak, the country’s largest coffee-producing province. Additional showers may damage crops further, providing some upward pressure on prices.

Inventory trends on ICE exchanges were mixed. US tariffs had previously limited Brazilian coffee imports, reducing stocks. As of Thursday, ICE-monitored arabica stocks dropped to a 1.75-year low of 398,645 bags, while robusta inventories fell to a four-month low of 5,567 lots. US buyers have been avoiding new Brazilian coffee contracts due to tariffs, tightening domestic supply, as roughly one-third of unroasted coffee in the US comes from Brazil. From August to October 2025, US imports of Brazilian coffee fell 52% year-on-year to 983,970 bags.

Rainfall data also influenced the market. Brazil’s largest arabica region, Minas Gerais, recorded 19.8 mm of rain in the week ending November 14 — 42% of the historical average, according to Somar Meteorologia.

On the supply side, analysts at StoneX forecast Brazil’s 2026/27 coffee crop at 70.7 million bags, including 47.2 million bags of arabica — a 29% increase year-on-year.

Vietnam’s coffee production is also rising. January–October 2025 exports increased 13.4% year-on-year to 1.31 million metric tons. Production for the 2025/26 crop year is projected at 1.76 million metric tons (29.4 million bags), a four-year high. The Vietnam Coffee and Cocoa Association (Vicofa) expects production to be 10% higher than last year if weather conditions remain favorable. Vietnam remains the world’s largest robusta producer.

Global supply data show mixed signals. The International Coffee Organization reported on November 7 that world coffee exports for the current marketing year (October–September) fell 0.3% year-on-year to 138.658 million bags.

Brazil’s Conab forecasted a smaller 2025 arabica crop, reducing it by 4.9% to 35.2 million bags, while total coffee production was adjusted down 0.9% to 55.2 million bags.

The USDA projects global coffee production in 2025/26 at a record 178.68 million bags, with arabica down 1.7% to 97.022 million bags and robusta up 7.9% to 81.658 million bags. Brazil’s crop is expected to rise 0.5% to 65 million bags, and Vietnam’s output is forecast up 6.9% to 31 million bags, a four-year high. Ending stocks for 2025/26 are projected at 22.819 million bags, up 4.9% from the previous year.