Brazil Weather and U.S. Tariffs Drive Coffee Prices to Multi-Month Highs
Dubai, August 19, 2025 (Qahwa World) – Coffee prices surged on Tuesday, with arabica futures climbing to a 2.25-month high and robusta reaching a two-month high, supported by dry conditions in Brazil’s key growing regions and tightening U.S. supplies following new tariffs on Brazilian coffee.
September arabica coffee (KCU25) rose 1.85% (+6.35¢/lb), while September ICE robusta (RMU25) gained 4.04% (+$168). The rise reflects mounting concern over Brazil’s weather, particularly in Minas Gerais, the country’s largest arabica-producing state, where Somar Meteorologia reported no rainfall during the week ending August 16.
Market support is also coming from the United States, where buyers are avoiding new contracts for Brazilian coffee due to a 50% tariff imposed on imports. Brazil typically supplies about one-third of U.S. unroasted coffee, making the tariff impact significant for roasters and traders.
Brazil’s July export figures further underscored supply concerns. According to the Trade Ministry, unroasted coffee exports fell 20.4% year-on-year to 161,000 metric tons. Exporter group Cecafé reported that green coffee shipments dropped 28% y/y to 2.4 million bags, while total coffee exports fell to 2.7 million bags. From January to July, Brazil’s overall exports declined 21% to 22.2 million bags.
Certified exchange inventories remain tight. ICE arabica stocks fell to a 1.25-year low of 726,661 bags on August 14 before recovering slightly to 733,105 bags this week. ICE robusta stocks dropped to a three-week low of 6,749 lots, down from late-July’s two-year high of 7,029 lots.
On the supply side, Brazil’s 2025/26 coffee harvest is advancing. Research firm Safras & Mercado estimates the crop was 94% complete as of August 6, with robusta nearly finished (99%) and arabica at 91%. Cooxupé, Brazil’s largest coffee cooperative, reported its members had completed 80.4% of their harvest by August 8.
Beyond Brazil, Vietnam’s coffee industry continues to influence robusta prices. Drought reduced 2023/24 production by 20% y/y to 1.47 million metric tons, the lowest in four years, while 2024 exports fell 17.1% to 1.35 million metric tons. However, recovery signs emerged with January–July 2025 exports up 6.9% y/y to 1.05 million metric tons.
The International Coffee Organization (ICO) reported that global coffee exports in June rose 7.3% y/y to 11.69 million bags, though October–June totals slipped 0.2% to 104.14 million bags.
Looking ahead, the USDA’s Foreign Agricultural Service (FAS) projects 2025/26 world coffee production at a record 178.7 million bags, up 2.5% year-on-year. Arabica output is expected to fall 1.7% to 97 million bags, while robusta is forecast to rise 7.9% to nearly 82 million bags. Ending stocks are projected to grow 4.9% to 22.8 million bags.
However, trader Volcafe sees a very different balance: a global arabica deficit of 8.5 million bags in 2025/26, the fifth consecutive year of shortages and larger than the 5.5 million bag deficit recorded in 2024/25. This highlights continued market tightness despite record overall supply projections.
