Coffee futures retreated after early gains, with September arabica down 1.66% and September ICE robusta slipping 0.12%. The pullback reflected faster progress in Brazil’s 2025/26 harvest, rising robusta inventories at ICE, and evidence of weaker Brazilian exports—factors that outweighed support from recent weather concerns and tariff-related supply fears.
Key takeaways
- Price move: September arabica fell 1.66% and September robusta eased 0.12%.
- Catalyst: Coffee’s decline tracked accelerating harvest pace in Brazil and higher robusta warehouse stocks monitored by ICE.
- Supply demand signals: Brazil’s June green coffee exports dropped sharply year over year, pressuring prices.
- Offsetting factor: Drier conditions in Minas Gerais earlier supported arabica, while tariff concerns added brief upside risk.
- Implication for investors: Near-term direction appears tied to inventory trends and ongoing export data, with weather and trade policy still capable of reversing sentiment.
What drove the move
Coffee prices turned lower as the pace of Brazil’s crop progress accelerated. Safras & Mercado reported that Brazil’s overall 2025/26 harvest was 77% complete as of July 16, ahead of 74% a year earlier and the 69% five-year average. The detailed breakdown showed robusta harvest completion at 93%, while arabica was 67% complete as of July 9.
Another data point came from Cooxupe, Brazil’s largest cooperative and exporter group. The co-op said its members’ harvest was 49.3% complete as of July 11, adding to the overall picture of steady progress in a market watching supply availability closely.
At the same time, inventory dynamics weighed on prices. ICE-monitored robusta inventories jumped to a 10-month high of 5,995 lots. For arabica, ICE-monitored inventories rose to a 5.25-month high of 892,468 bags on May 27, then backed off to 819,061 bags as of Thursday. The combination of higher robusta stocks and still-elevated arabica supplies suggested the market was leaning toward adequate near-term availability.
Weather support fades as exports weaken
Coffee futures initially moved higher earlier in the session, supported by carryover strength from Monday. Market participants pointed to signs of excessive dryness in Brazil, with Somar Meteorologia reporting that Minas Gerais—the country’s largest arabica growing state—received no rain during the week ended July 12. That kind of weather risk can tighten expectations around arabica yields and quality, helping prices stabilize after downtrends.
However, the market also received fresh evidence that exports from Brazil were softening. According to Cecafe, Brazil’s total June green coffee exports fell 31% year over year to 2.3 million bags. The decline was broad-based: arabica exports dropped 27% year over year to 1.8 million bags, while robusta exports were down 42% year over year to 476,334 bags. Slower shipments reduce immediate demand for producer coffee and can reinforce the view that supply is not tightening as quickly as the market had feared.
Trade policy and prior forecasts keep the market sensitive
Tariff concerns had provided support earlier in the month. Last Wednesday, President Trump announced plans to impose 50% tariffs on US imports from Brazil, effective August 1. That threat raised the risk of supply disruption from Brazil, the world’s largest producer of arabica. Even so, prices have continued to ease over the past two months as investors shifted attention back to broader production outlooks pointing toward abundant coffee supply.
Recent fundamental forecasts have been a key backdrop. On June 25, the USDA’s Foreign Agricultural Service projected Brazil’s 2025/26 coffee production would rise 0.5% year over year to 65 million bags. It also forecast Vietnam’s output would increase 6.9% year over year to 31 million bags, a four-year high. Vietnam is the world’s largest robusta producer, making its production trajectory important to the robusta balance.
Those expectations were shaped by earlier weather and export weakness in Vietnam. The 2023/24 crop year saw Vietnam’s coffee production decline 20% year over year to 1.472 million metric tons due to drought, the smallest crop in four years. Vietnam’s 2024 coffee exports fell 17.1% year over year to 1.35 million metric tons. Additionally, the Vietnam Coffee and Cocoa Association reduced its 2024/25 production estimate to 26.5 million bags on March 12, compared with a December estimate of 28 million bags. Still, more recent trade data has been firmer: Vietnam’s Jan–Jun 2025 exports were up 4.1% year over year to 943,000 metric tons, according to the Vietnam National Statistics Office.
The USDA’s biannual report, released on June 25, also leaned bearish for prices overall. It projected world coffee production in 2025/26 would increase 2.5% year over year to a record 178.68 million bags. It forecast arabica production down 1.7% to 97.022 million bags and robusta production up 7.9% to 81.658 million bags. For stocks, the report anticipated 2025/26 ending inventories rising 4.9% to 22.819 million bags from 21.752 million bags in 2024/25.
Even with that, some analysts see deficits for arabica. Volcafe projected a global 2025/26 arabica deficit of 8.5 million bags, wider than the 5.5 million bag deficit for 2024/25 and the fifth consecutive year of deficits. That view can help limit downside if weather or quality issues tighten the arabica supply picture.
What analysts and traders may watch next
With prices already reacting to harvest pace and inventory readings, investors are likely to track further ICE warehouse changes and updates on Brazil export flows. Market sensitivity will remain elevated around weather developments in key growing regions such as Minas Gerais, as well as any policy details and implementation timelines related to US tariffs on Brazilian imports. Upcoming data on weekly export activity and additional crop progress updates could be decisive for whether this pullback extends or stabilizes.
