Dubai – Qahwa World

The global coffee market is currently resting in a precarious calm, according to the International Coffee Organization’s (ICO) November 2025 Market Report. Despite major geopolitical and climatic events, the ICO Composite Indicator Price (I-CIP) showed only a marginal rise of 1.2%, averaging 330.44 US cents/lb.

This unexpected stability is not a sign of market health, but rather the result of a dramatic “offsetting effect” between two powerful, opposing forces: a historical US decision to soften tariffs on Brazilian coffee imports (a bearish signal), and devastating floods that struck Vietnam’s Central Highlands (a bullish factor).

  • The Damp Squib of US Tariff Relief

The most significant political event of the month was the US administration’s move to phase out the additional 40% tariff previously imposed on Brazilian coffee imports. This action should have triggered a sharp price correction downward, given Brazil’s status as the world’s largest producer.

The Professional Read: The market reaction was surprisingly muted. The I-CIP did dip to its monthly low (320.39 cents/lb) following the announcement, but the effect dissipated within three days. Analysts concur that the market had “priced in” the removal of the tariffs beforehand, drastically reducing the impact.

Compounding the lack of immediate bearish pressure, Brazil’s export performance remains subdued. Exports of Brazilian Naturals declined by 8.2% in October, marking the eighth consecutive month of negative growth for this key group, highlighting underlying challenges linked to the Arabica production cycle and not just trade barriers.

  • Vietnam’s Catastrophe: The Unlikely Price Stabilizer

As the US news failed to exert sustained downward pressure, a major climatic shock in Asia provided the necessary counter-balance. Severe flooding hit Vietnam’s Central Highlands, the global nucleus for Robusta coffee production.

• Destruction Estimates: Initial reports from Dak Lak indicated that an estimated 10% to 15% of the 2025/26 coffee crop, which was already harvested and undergoing the drying process, was significantly damaged.
• Price Resilience: This dire news provided crucial support, preventing Robusta coffee prices from sliding (they contracted only a negligible 0.1%). Furthermore, the supply concerns emanating from Asia helped push all Arabica groups (including Brazilian Naturals and Colombian Milds) higher, with increases ranging from 1.4% to 1.8%, contributing strongly to the overall I-CIP stability.

  • The Red Flag: Global Inventory Collapse

The most alarming data point in the ICO report is the state of exchange-certified stocks, which are rapidly depleting and indicate a severe structural vulnerability in the global supply chain.

• Robusta Stocks Crash: Certified Robusta coffee stocks at the London exchange plunged by a dramatic 28.3% in November, settling at a precarious 0.73 million bags.
• Arabica Drawdown: Arabica stocks in New York also drew down by 5.9%.

This inventory collapse means the market is quickly losing its buffer capacity. It is becoming almost entirely reliant on continuous, smooth flows of new harvests, making it exceptionally sensitive to any disruptions (like the future fallout from the Vietnam floods) and highly susceptible to sharp, upward price spikes.

  • Shifting Tides: The Decline of Latin American Dominance

While total global green coffee exports saw a slight rise of 1.9% in October 2025, the geographical distribution reveals a critical strategic shift.

• South America Retreats: Exports from South America (driven mainly by Brazil) declined by 13.0%, marking the eleventh consecutive month of negative growth for the region.
• Africa and Asia Surge: This gap was aggressively filled by other origins: Asia and Oceania exports jumped 23.9% (fueled by Vietnam), and African exports soared by 21.9% (led by Ethiopia and Uganda).
• Arabica Share Shrinks: The total share of Arabica coffee in green exports fell to 68.8% from 70.2% the previous year, underscoring the market’s increasing dependence on Robusta coffee to meet overall global demand.

  • The Bottom Line

The price stability observed in November was a fluke, a result of powerful forces cancelling each other out. The true economic background—collapsing exchange inventories and the sustained export decline from the world’s largest producer—suggests the market is in a highly precarious state of “active waiting.

The coffee sector is now dangerously exposed. Any further negative climate report or logistical disruption will likely shatter the current equilibrium, immediately unleashing a sharp, acute wave of price volatility. Buyers should prepare for potential supply shocks and the associated upward pricing pressure in the coming months.