Brazil’s Accelerating Harvest and Tariff Reprieve Push Coffee Prices Lower
Dubai, July 30, 2025 ,(Qahwa World) – Coffee prices fell on Tuesday as Brazil’s harvest progressed rapidly and concerns over a potential U.S. tariff on Brazilian beans eased.
September arabica futures (KCU25) dropped by 1.72%, closing at -5.20, while robusta futures (RMU25) edged down by 0.39% (-13). The decline followed fresh updates from Brazil’s largest coffee cooperative, Cooxupé, which reported that 67% of its harvest was completed as of July 25. Safras & Mercado added that Brazil’s national 2025/26 coffee harvest reached 84%, outpacing last year’s 81% and the five-year average of 77%. The breakdown revealed 96% of the robusta and 76% of the arabica crops had been harvested by July 23.
Markets also responded to remarks by U.S. Commerce Secretary Lutnick, who indicated Brazilian coffee might be exempt from the proposed 50% tariff, calming earlier fears of supply disruptions. Those fears had previously driven prices higher on concerns about global trade imbalances.
Prices have generally trended downward in recent months amid expectations of strong global supply. Arabica recently hit an eight-month low, while robusta dropped to its lowest level in over a year. The USDA’s June report estimated that Brazil’s 2025/26 coffee production would rise by 0.5% to 65 million bags, and Vietnam’s production would increase by 6.9% to a four-year high of 31 million bags.
Weather developments in Brazil have also pressured prices. Recent rainfall in Minas Gerais — Brazil’s key arabica-producing region — exceeded 200% of the historical average, reducing drought concerns.
Meanwhile, speculative activity remains a factor. ICE Futures Europe data revealed that fund managers increased net-short positions in robusta futures to 4,628 contracts — the highest in two years — potentially setting the stage for a short-covering rally. Inventories also reflect mixed signals: ICE-monitored robusta stocks rose to a one-year high of 7,029 lots, while arabica inventories fell to a 3.5-month low of 791,842 bags.
On the export front, Brazil’s green coffee shipments declined by 31% year-over-year in June to 2.3 million bags, with arabica exports falling 27% and robusta 42%. In Vietnam, drought conditions caused 2023/24 output to drop by 20% to its smallest level in four years. While 2024 exports were down 17.1% year-over-year, the first half of 2025 saw a 4.1% rebound.
Looking ahead, the USDA projects global coffee production for 2025/26 will reach a record 178.68 million bags, up 2.5% year-over-year. This includes a 1.7% drop in arabica and a 7.9% rise in robusta production. Ending stocks are forecast to climb 4.9% to 22.82 million bags.
Despite bearish trends, Volcafe projects an arabica deficit of 8.5 million bags for 2025/26 — the fifth consecutive global shortfall, and significantly wider than the 5.5 million bag deficit in 2024/25.
