Coffee Market Update: Trends and Insights

Recent Coffee Price Movements

On Thursday, coffee prices exhibited mixed results, with September arabica coffee declining by 0.55% and September robusta coffee gaining 0.69%. This fluctuation has kept prices hovering just above recent lows, reflecting ongoing market volatility. Notably, the September arabica coffee contract hit a record low earlier in the week, while the nearest-futures contract for July reached a 7.5-month low. Additionally, prices for September robusta coffee saw a drop to a 1.25-year low in the previous week.

Current Coffee Harvest in Brazil

The ongoing coffee harvest in Brazil is significantly impacting coffee pricing. Recently, the Cooxupe coffee cooperative reported that its members have completed 31% of the coffee harvest as of late June, which is lower than the 42% completed during the same period last year. Furthermore, predictions of dry conditions in Brazil’s coffee-growing regions over the next few days could facilitate a faster harvest. Cooxupe stands as Brazil’s largest coffee cooperative and exporter.

According to Safras & Mercado, the Brazilian coffee harvest for 2025/26 was noted to be 35% complete as of mid-June, slightly behind the previous year’s 37% but in line with the five-year average. Specifically, the robusta harvest is 49% complete, while arabica stands at 26%. Heavy rainfall has hindered the arabica harvest in several regions.

Weather Impact on Coffee Production

The recent surge in rainfall across Brazil has provided a much-needed boost to coffee crops, alleviating previous dryness concerns. According to meteorological insights, Brazil’s leading arabica coffee-growing area, Minas Gerais, received significant rainfall—5 mm—during the week leading to late June, marking 714% of the historical average for that period.

As a result of these favorable conditions, coffee prices have faced downward pressure over the last couple of months, with rising supply forecasts contributing to this trend. Recently, the USDA’s Foreign Agricultural Service predicted an increase in Brazil’s coffee production for 2025/26, projecting a year-over-year rise of 0.5% to reach 65 million bags. Simultaneously, coffee output in Vietnam is expected to increase by 6.9% year-over-year, reaching a four-year high of 31 million bags.

Inventory Trends Affecting Coffee Prices

In the robusta coffee sector, prices have support from declining inventories. Last Thursday, ICE-monitored robusta coffee stockpiles fell to a six-week low of 5,108 lots, although they rebounded slightly to 5,153 lots by Thursday. However, arabica prices face bearish factors, as inventories for ICE-monitored arabica coffee rose to a 4.75-month high of 892,468 bags earlier and were still relatively high at 842,223 bags as of Thursday.

Lower exports from Brazil are contributing to a more favorable price outlook. Recent reports indicate that Brazil’s green coffee exports in May declined by 36% year-over-year, totaling 2.8 million bags.

Challenges in Vietnam’s Coffee Production

On the other hand, Vietnam is facing challenges that have adversely affected its coffee production for the 2023/24 crop year. The country reported a 20% decrease in production, dropping to 1.472 million metric tons, marking the smallest yield in four years. Furthermore, coffee exports from Vietnam in 2024 are down by 17.1% year-over-year, totaling 1.35 million metric tons. The National Statistics Office of Vietnam also highlighted a 1.8% decrease in coffee exports from January to May this year, totaling 813,000 metric tons. The Vietnam Coffee and Cocoa Association has reduced its production projections for 2024/25 to 26.5 million bags.

Global Market Predictions

The USDA’s recent biannual report has revealed bearish forecasts for coffee prices. They anticipate a global increase in coffee production reaching a record 178.68 million bags for 2025/26, while predicting a 1.7% decrease in arabica production and a notable 7.9% rise in robusta production.

Additionally, the USDA projects that ending stocks for 2025/26 will grow by 4.9% to reach 22.819 million bags, up from 21.752 million bags in the previous year. According to Volcafe, the projections indicate an arabica coffee deficit of 8.5 million bags for 2025/26, which is a significantly wider gap compared to the previous year’s deficit of 5.5 million bags, marking the fifth consecutive year of deficits in this category.

This evolving landscape of the coffee market showcases complexities in production, environmental factors, and inventory shifts that continue to influence pricing dynamics. Understanding these variables is essential for stakeholders and consumers alike as they navigate the current coffee supply context.