(HSV VIETNAM GROUP) – Over the past week, Arabica and Robusta coffee futures prices on the international market increased by 10.4% and 18%, respectively, reaching a new two-week high.
Coffee prices increased sharply thanks to many factors including the frost situation in Brazil, Brazilian export output and reduced coffee inventories at the Intercontinental Exchange (ICE).
Closing the trading session on August 15, the price of arabica coffee delivered in September in the New York market increased by 4.64%, to 3.41 US dollars / pound (0.453 kg). Meanwhile, the price of robusta coffee delivered in September in London increased 2.86% to 4,201 USD/ton. These are new price peaks over the past two weeks for the two most popular coffees on the market.
Arabica coffee prices increased after frosty weather appeared in Cerrado Mineiro, one of the main Arabica coffee growing regions in Brazil. While damage to coffee trees was limited, this weather development highlights the risk of frost in Brazil's current winter. Frost can cause tissue death in the leaves and young branches of coffee plants as well as damage flowers and reduce fruit production.
Coffee prices have risen sharply since last Wednesday when the Brazilian Ministry of Commerce reported that Brazil's green coffee exports in July fell 20.4% year-on-year, to 161,000 tons.
According to the Brazilian Coffee Export Association (Cecafe), Brazil's arabica coffee exports last month decreased by 21% over the same period in 2024, while robusta coffee exports decreased by 49% over the same period last year. During the first seven months of the year, Brazil's coffee exports decreased annually by 21%, to 22.2 million bags (each bag equivalent to 60%).
Robusta coffee prices increased when Vietnam, the world's largest robusta coffee producer, is entering the low season with lower harvests, limiting available supply.
In Brazil, coffee farmers continue to hoard goods waiting for higher prices, mainly focusing on the delivery of futures contracts, according to coffee trading company Equatorial Traders.
On the other hand, the decline in coffee inventories on ICE is supporting Arabica prices. Arabica coffee inventories in ICE-standard warehouses fell to a 15-month low of 726,661 bags on August 14, before recovering slightly to 731,739 bags on August 15.
The amount of robusta coffee inventory on ICE also dropped to its lowest level in 3 weeks on August 15, at 6,907 lots (each lot is equivalent to 10 tons).
The coffee market is waiting for more clarity on US tariff policy as President Trump has not yet exempted coffee from the 50% tax on Brazilian exports. This tax could affect Brazilian coffee sales to the US and increase Brazilian coffee inventories.
Above-average rainfall in Brazil last week eased concerns about dry conditions and was a negative factor for coffee prices.
The coffee harvest is going smoothly in Brazil, which could also put downward pressure on coffee prices. Agricultural consulting firm Safras & Mercado noted that Brazil's total 2025-2026 coffee harvest was 94% completed as of June 608, higher than 92% in the same period last year.
According to the International Coffee Organization (ICO), global coffee exports in June increased by 7.3% over the same period last year, reaching 11.69 million bags.
The upward momentum of coffee prices will face challenges in the coming months if global coffee production increases as predicted.
In a report in June, the US Department of Agriculture (USDA) expected that world coffee production in the 2025-2026 crop year will increase by 2.5% compared to the previous crop year, to a record level of 178.68 million bags. Of which, arabica output decreased by 1.7% to 97.022 million bags and robusta output increased by 7.9% to 81.658 million bags.
USDA forecasts that Brazilian coffee output in the 2025-2026 crop year will increase 0.5% over the same period last year to 65 million bags and Vietnamese coffee output in the same year will increase 6.9% to reach a 4-year high of 31 million bags.
Ha Diem HSV