Expectations for Ample Global Coffee Supplies Pressure Prices

September arabica espresso (KCU25) Friday closed down -1.90 (-0.62%), and September ICE robusta espresso (RMU25) closed down -4 (-0.11%).

Espresso costs settled decrease on Friday, with arabica espresso posting a 6-3/4 month low.  The outlook for ample espresso provides is undercutting costs.   On Wednesday, the USDA’s International Agricultural Service (FAS) forecast that Brazil’s 2025/26 espresso manufacturing will enhance by 0.5% year-over-year (y/y) to 65 million baggage and that Vietnam’s 2025/26 espresso output will rise by 6.9% y/y to a 4-year excessive of 31 million baggage.  Brazil is the world’s largest producer of arabica espresso, and Vietnam is the world’s largest producer of robusta espresso.

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The advancing espresso harvest in Brazil can be weighing on espresso costs.  On Tuesday, Brazil’s Cooxupe espresso co-op introduced that its members reported the espresso harvest was solely 24.3% full as of June 20, in contrast with 34.2% accomplished on the similar time final yr.  Cooxupe is Brazil’s largest espresso cooperative and Brazil’s largest exporter of espresso.  Additionally, Safras & Mercado just lately reported that Brazil’s 2025/26 espresso harvest was 35% full as of June 11, barely behind final yr’s comparable stage of 37% however in keeping with the 5-year common of 35%.  The breakdown confirmed that 49% of the robusta harvest and 26% of the arabica harvest had been full as of June 11.  Brazil’s arabica harvest has been slowed by heavy rain in some areas.

Espresso costs have additionally been pressured this week after the chance of frost was faraway from climate forecasts in Brazil’s coffee-growing areas, together with São Paulo and Minas Gerais.

Under-normal rainfall in Brazil is supportive for espresso costs.  On Monday, Somar Meteorologia reported that Brazil’s largest arabica coffee-growing space, Minas Gerais, acquired no rain in the course of the week ended June 21.  

Robusta espresso costs have acquired help from tightening provides after ICE-monitored robusta espresso inventories fell to a 5-week low on Thursday at 5,108 tons.  Nonetheless, in a bearish issue for arabica costs, ICE-monitored arabica espresso inventories rose to a 4-3/4 month excessive of 892,468 baggage on Might 27 and had been modestly beneath that top at 844,319 baggage as of Friday.

Smaller espresso exports from Brazil are bullish for costs.  Final Wednesday, Cecafe reported that Brazil’s Might inexperienced espresso exports fell by -36% y/y to 2.8 million baggage.

Because of drought, Vietnam’s espresso manufacturing within the 2023/24 crop yr decreased by 20% to 1.472 MMT, the smallest crop in 4 years.  Additionally, Vietnam’s Basic Statistics Workplace reported that 2024 Vietnam espresso exports fell -17.1% y/y to 1.35 MMT.  Final Tuesday, Vietnam’s Nationwide Statistics Workplace reported that Vietnam’s 2025 Vietnam’s Jan-Might espresso exports are down -1.8% y/y to 813,000 MT.  As well as, the Vietnam Espresso and Cocoa Affiliation on March 12 reduce its 2024/25 Vietnam espresso manufacturing estimate to 26.5 million baggage from a December estimate of 28 million baggage.

The USDA’s biannual report, launched on Wednesday, was bearish for espresso costs.  The USDA’s International Agriculture Service (FAS) projected that world espresso manufacturing in 2025/26 will enhance +2.5% y/y to a file 178.68 million baggage, with a -1.7% lower in arabica manufacturing to 97.022 million baggage and a +7.9% enhance in robusta manufacturing to 81.658 million baggage.  The USDA’s FAS forecasts that 2025/26 ending shares will climb by +4.9% to 22.819 million baggage from 21.752 million baggage in 2024/25.

For the 2025/26 advertising and marketing yr, Volcafe initiatives a worldwide 2025/26 arabica espresso deficit of -8.5 million baggage, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive yr of deficits. 

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