December arabica coffee (KCZ25) today is up +6.15 (+1.55%), and November ICE robusta coffee (RMX25) is down -35 (-0.77%).
Coffee prices today are mixed. Supply concerns are underpinning arabica coffee prices as President Trump is expected to announce new tariffs on Columbia, the world’s second-largest producer of arabica coffee beans. Also, strength in the Brazilian real (^USDBRL) is supportive for arabica coffee as the real climbed to a 1-week high against the dollar today. The stronger real discourages export sales from Brazil’s coffee producers.
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Robusta coffee is under pressure due to forecasts for rain in Vietnam’s Central Highlands, the country’s major coffee-producing region, which is expected to support crop development and coffee yields. The Dak Lak province, the country’s largest coffee-growing area, is forecast to receive 70 mm of rain over the next week compared with a historical average of 61.3 mm.
Coffee prices have support from shrinking ICE coffee inventories. The 50% tariffs imposed on US imports from Brazil have led to a sharp drawdown in ICE coffee inventories. ICE-monitored arabica inventories fell to a 19-month low of 467,110 bags last Friday, and ICE robusta coffee inventories fell to a 3-month low of 6,160 lots today. American buyers are voiding new contracts for purchases of Brazilian coffee beans due to the 50% tariffs imposed on US imports from Brazil, thereby tightening US supplies, as about a third of America’s unroasted coffee comes from Brazil.
Hopes that 50% tariffs on Brazilian goods will soon be removed are negative for coffee prices. Last Thursday, US Trade Representative Greer said he and Secretary of State Rubio had “very positive talks” regarding trade with Brazilian Minister of Foreign Affairs Vieira. Both sides said they will schedule a meeting between President Trump and President Lulu at the earliest possible occasion.
An easing of dry conditions in Brazil is bearish for coffee prices. Somar Meteorologia reported today that Brazil’s largest arabica coffee-growing area, Minas Gerais, received 44.7 mm of rain during the week ended October 18, or 136% of the historical average.
Coffee prices also garnered support after the National Oceanic and Atmospheric Administration (NOAA) on September 16 increased the likelihood of a La Niña weather system in the southern hemisphere from October to December to 71%, which could bring excessive dry weather to Brazil and harm the 2026/27 coffee crop. Brazil is the world’s largest producer of arabica coffee.
Robusta coffee is also under pressure due to an increase in coffee supplies from Vietnam. The Vietnam National Statistics Office reported Monday that Vietnam’s Jan-Sep 2025 coffee exports were up +10.9% y/y to 1.230 MMT.
Stronger coffee exports are bearish for prices after the International Coffee Organization (ICO) reported last Monday that global coffee exports for the current marketing year (Oct-Aug) rose +0.2% y/y to 127.92 million bags, indicating adequate exports and supplies.
Coffee prices found support after Conab, Brazil’s crop forecasting agency, cut its Brazil 2025 arabica coffee crop estimate on September 4 by -4.9% to 35.2 million bags from a May forecast of 37.0 million bags. Conab also reduced its total Brazil 2025 coffee production estimate by 0.9% to 55.2 million bags, from a May estimate of 55.7 million bags.
A bumper robusta coffee crop in Vietnam is bearish for prices. Vietnam’s 2025/26 coffee production is projected to climb +6% y/y to 1.76 MMT, or 29.4 million bags, a 4-year high. Vietnam is the world’s largest producer of robusta coffee.
The USDA’s Foreign Agriculture Service (FAS) projected on June 25 that world coffee production in 2025/26 will increase by +2.5% y/y to a record 178.68 million bags, with a -1.7% decrease in arabica production to 97.022 million bags and a +7.9% increase in robusta production to 81.658 million bags. FAS forecasted that Brazil’s 2025/26 coffee production will increase by +0.5% y/y to 65 million bags and that Vietnam’s 2025/26 coffee output will rise by 6.9% y/y to a 4-year high of 31 million bags. FAS forecasts that 2025/26 ending stocks will climb by +4.9% to 22.819 million bags from 21.752 million bags in 2024/25. However, Volcafe is projecting 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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