Coffee Prices Surge Over 2025 Crop Concerns As Arabica Hits 13-Year High – CoffeeTalk

Coffee prices are currently higher than they were a year ago, with arabica coffee (KCZ24) rising by 13.10 (+4.68%) and robusta coffee (RMF25) up by 138 (+2.96%). This is due to concerns about longer-term coffee crop damage due to Brazilian drought conditions, which have been below average since April. Rainfall in Brazil has consistently been below average since April, damaging coffee trees during the flowering stage and reducing the prospects for Brazil’s 2025/26 arabica coffee crop.

Tight robusta supplies are supportive for robusta prices, as Vietnam’s General Department of Customs reported that its October coffee exports fell -11.6% m/m to 45,412 MT and Jan-Oct coffee exports fell -11.1% y/y to 1.15 MMT. Robusta coffee prices are underpinned by reduced robusta production, with Vietnam’s agriculture department reporting a 20% drop in coffee production in the 2023/24 crop year due to drought.

Conab, Brazil’s crop forecasting agency, cut its 2024 Brazil coffee production forecast to 54.8 million bags from May’s forecast of 58.8 million bags. Recent rainfall in Brazil temporarily eased dryness concerns, with rainfall in Brazil’s largest arabica coffee-producing area of Minas Gerais receiving 60.9 mm of rain last week, or 127% of the historical average.

Signs of larger global coffee supplies are bearish for prices, as the International Coffee Organization (ICO) reported that global coffee exports in September rose by 25% y/y to 10.76 mln bags and from Oct-Sep rose by 11.7% y/y to 137.27 mln bags. Tightness in coffee inventories is also supporting coffee prices, with ICE-monitored arabica coffee inventories partially recovering from a 24-year low of 224,066 bags to post a 1-3/4 year high of 879,117 bags.

Brazilian coffee export news has been bearish, with Cecafe reporting a 11% y/y increase in green coffee exports to 4.57 million bags and a 33% y/y increase in 2023/24 coffee exports to 47.3 million bags. The USDA’s bi-annual report on June 20 was bearish for coffee prices, with the FAS projecting a 4.2% y/y increase in world coffee production in 2024/25, with a 4.4% increase in arabica production to 99.855 million bags and a 3.9% increase in robusta production to 76.38 million bags.

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