Coffee Prices Surge on Brazil Weather Concerns | U.S. Finance News
December arabica espresso (KCZ25) on Friday closed up +13.30 (+3.64%), and September ICE robusta espresso (RMU25) closed up +108 (+2.27%).Coffee costs rallied sharply on Friday, with arabica espresso posting a 3.5-month high and robusta posting a 3-month high. Coffee costs continued their 3-week-long rally on Friday on climate issues in Brazil. On Monday, Somar Meteorologia reported that Brazil’s largest arabica coffee-growing space, Minas Gerais, obtained no rain during the week ended August 16. Reports of injury to some of Brazil’s espresso crop from final week’s frost are additionally boosting costs.
Don’t Miss a Day: From crude oil to espresso, signal up free for Barchart’s best-in-class commodity evaluation. Coffee costs even have help on issues about tighter US espresso provides, as American patrons are voiding new contracts on purchases of Brazilian espresso beans due to the 50% tariffs imposed on Brazilian exports to the US. That is tightening the espresso provide within the US market since about a third of unroasted espresso comes from Brazil.Tighter espresso provides from Brazil are additionally supporting costs. On August 6, Brazil’s Trade Ministry reported that Brazil’s July unroasted espresso exports fell -20.4% y/y to 161,000 MT. In associated bullish news launched final Wednesday, Brazil’s inexperienced espresso exports in July fell -28% y/y to 2.4 million baggage, in line with exporter group Cecafe. Cecafe mentioned July arabica exports fell -21% y/y, whereas robusta exports plunged -49% y/y. Cecafe mentioned Brazil’s July espresso exports fell -28% to 2.7 million baggage, and that espresso shipments during Jan-July fell -21% to 22.2 million baggage.A decline in ICE espresso inventories is supporting espresso costs. ICE-monitored arabica inventories fell to a 1.25-year low of 726,661 baggage final Thursday, earlier than recovering barely to 729,606 baggage on Friday. Also, ICE robusta espresso inventories fell to a 4-week low on Friday of 6,642 heaps, reasonably beneath the 2-year high of 7,029 heaps posted on July 28.The ongoing Brazilian espresso harvest is bearish for espresso costs. Safras & Mercado reported Friday that Brazil’s general 2025/26 espresso harvest was 99% full as of August 20, forward of the comparable degree of 98% final yr. The breakdown confirmed that 100% of the robusta harvest and 98% of the arabica harvest have been full as of August 20. In associated news, Brazil’s Cooxupe espresso co-op introduced Tuesday that the harvest amongst its members was 86.1% full as of August 15. Cooxupe is Brazil’s largest espresso cooperative and Brazil’s largest exporter group.
As a bearish issue, the International Coffee Organization (ICO) reported August 6 that world June espresso exports rose +7.3% y/y to 11.69 million baggage. However, cumulative Oct-Jun espresso exports have been down -0.2% y/y at 104.14 million baggage.Due to drought, Vietnam’s espresso manufacturing within the 2023/24 crop yr decreased by -20% y/y to 1.472 MMT, the smallest crop in 4 years. Also, Vietnam’s General Statistics Office reported that 2024 Vietnam espresso exports fell by -17.1% y/y to 1.35 MMT. Additionally, the Vietnam Coffee and Cocoa Association diminished its 2024/25 Vietnam espresso manufacturing estimate to 26.5 million baggage on March 12, down from a December estimate of 28 million baggage. By distinction, the Vietnam National Statistics Office reported final Tuesday that Vietnam’s Jan-Jul 2025 espresso exports have been up +6.9% y/y to 1.05 MMT.The USDA’s Foreign Agriculture Service (FAS) projected on June 25 that world espresso manufacturing in 2025/26 will increase by +2.5% y/y to a document 178.68 million baggage, with a -1.7% lower in arabica manufacturing to 97.022 million baggage and a +7.9% increase in robusta manufacturing to 81.658 million baggage. FAS forecasted that Brazil’s 2025/26 espresso manufacturing will increase by +0.5% 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 high of 31 million baggage. FAS forecasts that 2025/26 ending stocks will climb by +4.9% to 22.819 million baggage from 21.752 million baggage in 2024/25. However, Volcafe is projecting a world 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.
On the date of publication,
Rich Asplund
didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All info and knowledge on this article is solely for informational functions.
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
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