Dubai, July 31, 2025 –( Qahwa World) – Arabica coffee prices experienced a drop on Wednesday due to reduced concerns about potential tariffs affecting Brazilian coffee exports. The futures for September arabica coffee declined by 3.10 points (-1.05%), whereas robusta coffee futures saw an increase of 66 points (+1.97%), hitting their highest level in two weeks.
This decrease in arabica coffee prices came after Commerce Secretary Lutnick indicated that Brazil’s coffee exports might avoid a previously proposed 50% tariff. The announcement alleviated market worries over potential disruptions from Brazil, the largest producer of arabica coffee globally.
Meanwhile, robusta coffee prices benefited from dry weather conditions forecasted for Vietnam, the world’s top robusta coffee producer. Predictions of no rain in Vietnam’s key coffee-growing regions for the upcoming week provided additional market support. Furthermore, significant short positions reported by ICE Futures Europe highlighted the likelihood of potential short-covering rallies in robusta coffee futures.
Brazil’s ongoing coffee harvest continues to impact global coffee market dynamics. Cooxupe, Brazil’s largest coffee cooperative, announced that their harvest reached 67% completion as of July 25. Overall, Brazil’s 2025/26 coffee harvest was 84% completed by July 23, outpacing the prior year’s progress and exceeding the five-year average.
Coffee prices have generally weakened in recent months due to expectations of ample supply. According to the latest report from the USDA’s Foreign Agricultural Service, Brazil’s coffee production for 2025/26 is forecasted to increase modestly by 0.5% year-on-year to 65 million bags, while Vietnam’s production is expected to rise by 6.9% to reach 31 million bags, a four-year high.
Recent rains in Brazil’s Minas Gerais region, the primary arabica-producing area, have further eased concerns about drought conditions. Somar Meteorologia reported significant rainfall of 3.5 mm in the week ending July 26, well above historical averages.
Inventory levels also present mixed signals for coffee markets. Robusta coffee inventories monitored by ICE reached a one-year high, indicating a bearish outlook. In contrast, arabica inventories dropped to their lowest in three and a half months. Brazilian coffee exports experienced a notable reduction, falling by 31% in June compared to the previous year, potentially signaling tighter supply conditions.
Vietnam continues to grapple with coffee production issues stemming from drought conditions, recording its smallest crop in four years for the 2023/24 season. Additionally, Vietnam’s coffee exports in 2024 declined by 17.1%. However, exports from January to June 2025 increased slightly by 4.1% compared to the same period last year.
The USDA’s latest global outlook anticipates record-breaking coffee production for the 2025/26 season, reaching 178.68 million bags, driven by a robusta increase of 7.9%. Conversely, arabica production is forecasted to decline by 1.7%. Ending stocks for the season are expected to rise nearly 5%.
Additionally, Volcafe has forecasted a substantial global deficit for arabica coffee at 8.5 million bags for the 2025/26 season, an increase from the previous year’s deficit of 5.5 million bags, marking five consecutive years of deficits.
