Arabica Coffee Prices Decline Amid Harvest Pressure in Brazil
Dubai, 20-07-2025 (QW):- Arabica coffee futures fell on Friday, weighed down by accelerated harvest activity in Brazil. September Arabica contracts (KCU25) closed down 1.17% at -3.60, while September Robusta futures (RMU25) rose 1.09%, gaining +36.
Brazil’s 2025/26 coffee harvest is progressing rapidly. As of July 16, the harvest was 77% complete—ahead of last year’s 74% and the 5-year average of 69%—according to Safras & Mercado. Robusta harvesting reached 93%, while arabica was at 67% as of July 9. Cooxupé, Brazil’s largest coffee cooperative and exporter, reported that its members had completed 49.3% of their harvest by July 11.
Earlier in the week, arabica prices saw gains on weather concerns. Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica-producing region, received no rainfall during the week ending July 12, raising fears of drought stress.
Meanwhile, robusta futures received support from short covering. ICE Futures Europe reported that speculative short positions in robusta increased by 1,163 contracts to 1,294—marking the highest level in two years.
Inventory changes also influenced market sentiment. Robusta inventories monitored by ICE rose to a 10-month high of 5,995 lots on Friday. In contrast, arabica stocks dropped to a 2.5-month low of 814,055 bags, down from a 5.5-month high of 892,468 bags recorded in late May.
Exports data offered mixed signals. Brazil’s green coffee exports for June declined 31% year-over-year to 2.3 million bags. Arabica exports dropped 27% to 1.8 million bags, while robusta exports plunged 42% to 476,334 bags, according to Cecafé.
Geopolitical developments also affected arabica prices. Last week, U.S. President Donald Trump announced a 50% tariff on U.S. imports from Brazil, effective August 1, sparking concerns over supply disruptions from the world’s largest arabica producer.
Looking ahead, expectations of abundant global supply continue to exert downward pressure. On June 25, the USDA’s Foreign Agricultural Service projected Brazil’s 2025/26 coffee production to rise by 0.5% to 65 million bags. Vietnam’s output is forecasted to increase by 6.9% to a 4-year high of 31 million bags. Brazil leads global arabica production, while Vietnam dominates robusta output.
Vietnam’s recent drought significantly impacted yields. The country’s 2023/24 crop shrank 20% year-over-year to 1.472 million metric tons (MMT), the smallest in four years. Coffee exports in 2024 dropped 17.1% to 1.35 MMT. The Vietnam Coffee and Cocoa Association cut its 2024/25 production estimate to 26.5 million bags, down from 28 million. However, the country’s coffee exports rose 4.1% year-over-year to 943,000 MT in the first half of 2025.
The USDA’s global outlook for 2025/26 is also bearish. World coffee production is expected to grow by 2.5% to a record 178.68 million bags. While arabica output is forecasted to decline by 1.7% to 97.02 million bags, robusta is expected to rise 7.9% to 81.66 million bags. Ending stocks are projected to climb 4.9% to 22.82 million bags.
Despite the broader outlook, Volcafe projects a global arabica deficit of 8.5 million bags for 2025/26—wider than the previous year’s 5.5 million bag shortfall and marking the fifth consecutive year of arabica deficits.
