July arabica coffee (KCN25) Wednesday closed down -5.75 (-1.47%), and July ICE robusta coffee (RMN25) closed down -17 (-0.32%).
Coffee prices on Wednesday settled moderately lower. Coffee prices have been on the defensive since Tuesday when Conab, Brazil’s crop forecasting agency, raised its Brazil 2025 coffee production estimate to 55.7 million bags from a January estimate of 51.81 million bags.
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Weakness in the Brazilian real (^USDBRL) is also undercutting coffee prices. The real on Wednesday fell to a 2-week low against the dollar, encouraging export selling from Brazil’s coffee producers.
Meanwhile, losses in robusta coffee were limited by carryover support from Tuesday when Vietnam’s National Statistics Office reported that Vietnam’s 2025 Jan-Apr coffee exports were down -9.8% y/y to 663,000 MT.
Coffee prices are supported by lackluster rainfall last week in Brazil. Somar Meteorologia reported Monday that Brazil’s biggest arabica coffee growing area of Minas Gerais, received 1.5 mm of rain in the week ended April 26, or 21% of the historical average.
Last Tuesday, arabica coffee rose to a 2-1/2 month high, and robusta posted a 5-week high on concern about a smaller Brazilian coffee crop. On April 22, Rabobank predicted Brazil’s 2025/26 arabica coffee crop would fall -13.6% y/y to 38.1 million bags, citing dry weather in key arabica-growing areas that significantly reduced flowering of coffee trees. On April 9, Cecafe reported that Brazil’s March green coffee exports fell -26% y/y to 2.95 million bags.
Demand concerns are bearish for coffee prices. Several global commodity importers, including Starbucks, Hershey, and Mondelez International, said the US’s baseline 10% tariff on imports would raise prices and further pressure sales volumes.
The current coffee inventory situation is mixed. Last Wednesday, ICE-monitored robusta coffee inventories fell to a 4-month low of 4,225 lots. Conversely, ICE-monitored arabica coffee inventories rose to a 2-3/4 month high Wednesday of 844,473 bags.
Robusta coffee has support from reduced robusta production. Due to drought, Vietnam’s coffee production in the 2023/24 crop year dropped by -20% to 1.472 MMT, the smallest crop in four years. Also, Vietnam’s General Statistics Office reported that 2024 Vietnam coffee exports fell -17.1% y/y to 1.35 MMT. On Tuesday, Vietnam’s National Statistics Office reported that Vietnam’s 2025 Jan-Apr coffee exports are down -9.8% y/y to 663,000 MT. In addition, the Vietnam Coffee and Cocoa Association on March 12 cut its 2024/25 Vietnam coffee production estimate to 26.5 million bags from a December estimate of 28 million bags. Conversely, Rabobank predicted that Brazil’s 2025/26 robusta coffee crop would climb +7.3% y/y to a record 24.7 million bags.
News of larger global coffee exports is bearish for prices. Conab reported on February 4 that Brazil’s 2024 coffee exports rose +28.8% y/y to a record 50.5 million bags. However, ICO reported on February 6 that Dec global coffee exports fell -12.4% y/y to 10.73 million bags, and Oct-Dec global coffee exports fell -0.8% y/y to 32.25 million bags.
The USDA’s biannual report on December 18 was mixed for coffee prices. The USDA’s Foreign Agriculture Service (FAS) projected that world coffee production in 2024/25 will increase +4.0% y/y to 174.855 million bags, with a +1.5% increase in arabica production to 97.845 million bags and a +7.5% increase in robusta production to 77.01 million bags. The USDA’s FAS forecasts that 2024/25 ending stocks will fall by -6.6% to a 25-year low of 20.867 million bags from 22.347 million bags in 2023/24. Separately, the USDA’s FAS on November 22 projected Brazil’s 2024/25 coffee production at 66.4 MMT, below its previous forecast of 69.9 MMT. The USDA’s FAS projects Brazil’s coffee inventories at 1.2 million bags at the end of the 2024/25 season in June, down -26% y/y.
For the 2025/26 marketing year, Volcafe on December 17 cut its 2025/26 Brazil arabica coffee production estimate to 34.4 million bags, down by about 11 million bags from a September estimate after a crop tour revealed the severity of an extended drought in Brazil. Volcafe projects a global 2025/26 arabica coffee deficit of -8.5 million bags, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive year of deficits.
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