Dubia, August 6, 2025 (Qahwa World) – Global coffee prices posted a sharp decline in July 2025, with all major coffee groups experiencing double-digit contractions, according to the latest Coffee Market Report from the International Coffee Organization (ICO). The downturn, which reflects both improving supply fundamentals and mounting global economic uncertainty, comes as the market adjusts to a predicted surplus in the 2024/25 coffee year and ongoing disruptions in international trade policy.
Market Overview: Prices Fall Across the Board
The ICO Composite Indicator Price (I-CIP) averaged 259.31 US cents/lb in July — an 11.8% drop from the previous month. While the year-on-year average remains 9.6% higher than July 2024, the downward trajectory is evident, with the price trending between 252.46 and 269.57 US cents/lb throughout the month.
Breaking down the group averages:
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Colombian Milds fell to 322.37 US cents/lb (−10.5%)
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Other Milds dropped to 325.50 US cents/lb (−10.4%)
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Brazilian Naturals declined to 297.04 US cents/lb (−12.3%)
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Robustas saw the steepest fall, tumbling to 167.19 US cents/lb (−14.8%)
The declines were echoed in the futures markets. New York ICE prices dropped 12.3% to 289.17 US cents/lb, a nine-month low, while London ICE fell 16.3% to 153.43 US cents/lb.
Key Market Pressures: Supply Surplus and Tariff Tensions
Several converging factors contributed to the bearish price movement:
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Surplus Expectations: The 2024/25 coffee year is projected to be in surplus, with improved output from major producers.
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Brazil’s Accelerated Harvest: As of July 23, Brazil’s harvest was 84% complete, ahead of last year’s pace.
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Tariff Anxiety: New U.S. import tariffs have cast a shadow over trade flows. The UK-based National Institute of Economic and Social Research (NIESR) forecasts a potential 1.1% reduction in global GDP by 2030 if the current tariff regime persists.
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Inventory Buildup: Certified stocks of Robusta coffee in London surged by 35.8%, reaching 1.18 million bags, while Arabica stocks in New York fell 8.1% to 0.83 million bags.
Volatility and Differentials: A Market in Flux
Volatility in the I-CIP eased slightly to 10.2%, but Robusta volatility jumped from 10.3% to 13.1%. Futures market volatility also increased, particularly in London (up 6.1 points to 16.6%).
Price differentials shifted notably:
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Colombian Milds vs. Other Milds: Widened slightly to –3.13 US cents/lb
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Colombian Milds vs. Brazilian Naturals: Up 17.5% to 25.32 US cents/lb
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Colombian Milds vs. Robustas: Narrowed by 5.3%, averaging 155.17 US cents/lb
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Brazilian Naturals vs. Robustas: Also tightened by 8.8% to 129.85 US cents/lb
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The London–New York arbitrage narrowed 7.2% to 135.74 US cents/lb
Export Performance: Trade Rebounds, But Regional Divergence Grows
Despite price weakness, global green coffee exports grew 3.3% year-on-year in June 2025 to reach 10.23 million bags, marking the second consecutive month of positive growth. However, year-to-date green bean exports remain down 3.0%, at 91.68 million bags compared to 94.52 million over the same period last year.
By coffee group:
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Other Milds: +14.8% (2.71 million bags)
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Colombian Milds: +9.0% (1.1 million bags)
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Robustas: +16.9% (3.92 million bags)
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Brazilian Naturals: –21.3% (2.51 million bags), with Brazil’s own exports plummeting 28.9%
Arabica’s share of total green bean exports increased to 62.9%, up from 61.4% a year earlier.
Regional Export Trends: Asia and Africa Rise as South America Retreats
Exports of all coffee forms totaled 11.69 million bags in June, up 7.3% year-on-year.
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Asia & Oceania: Surged 38.6% to 3.34 million bags, led by Vietnam (+64.6%) and Indonesia (+63.2%)
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Africa: Grew 28.1% to 2.19 million bags, driven by Uganda (+51.4%) and Ethiopia (+15.0%)
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Mexico & Central America: Rose 18.0% to 2.0 million bags, with Nicaragua leading (+50.6%)
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South America: Slumped 18.1% to 4.16 million bags, with Brazil falling 31.4% — the eighth straight month of contraction
Soluble and Roasted Coffee Exports Surge
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Soluble coffee exports rose 47.2% in June to 1.35 million bags, making up 11.5% of total exports so far this coffee year.
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Brazil led with 0.30 million bags
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Roasted coffee exports increased 58.1% to 0.08 million bags
ICE Launches New Arabica Contract
Starting 8 September 2025, ICE Futures US will introduce a new 10-tonne Arabica Coffee “C” Metric Contract (symbol AC). Eligible origins include Brazil, Vietnam, Colombia, Ethiopia, India, and 16 other countries, reflecting broader global integration into futures markets.
Outlook: A Market Redefining Itself
The ICO’s July 2025 report paints a picture of a coffee market at a pivotal juncture — caught between the weight of geopolitical volatility and the promise of supply-driven price moderation. With Brazil’s exceptional 2023/24 season behind us, and rising output from Vietnam, Uganda, Indonesia, and Ethiopia taking center stage, traditional trade hierarchies are shifting.
The sharp rise in soluble and Robusta exports suggests an evolving demand curve, possibly shaped by cost sensitivity and changing consumption habits. Meanwhile, the new ICE Arabica contract points toward a reconfiguration of how coffee is hedged, traded, and delivered across borders.
As the 2024/25 coffee year nears its conclusion, stakeholders are watching closely: Will the surplus soften volatility, or will new macroeconomic shocks redraw the market map once again?
