Arabica Coffee Supported by Limited Rainfall in Brazil

Rich Asplund

Wed, Jul 9, 2025, 11:21 AM 4 min read

September arabica coffee (KCU25) today is up +0.70 (+0.25%), and September ICE robusta coffee (RMU25) is down -85 (-2.38%).

Coffee prices today are mixed, with robusta falling to a 1.5-week low.  Arabica coffee has support from forecasts for limited rainfall over the next week in Brazil's coffee-growing regions.  However, robusta coffee is under pressure due to signs of increased coffee supplies from Vietnam, following the Vietnam National Statistics Office's report on Monday that Vietnam's Jan-Jun 2025 coffee exports were up +4.1% year-over-year to 943,000 MT.

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Below-normal rainfall in Brazil is supportive for coffee prices.  Somar Meteorologia reported Monday that Brazil's largest arabica coffee-growing area, Minas Gerais, received no rain during the week ended July 5.

On Tuesday, Sep arabica coffee posted a contract low, and on Monday, the July (N25) nearest-futures contract fell to a 7.5-month low, as the advancing coffee harvest in Brazil weighs on prices.  On Tuesday, Brazil's Cooxupe coffee co-op announced that its members reported the coffee harvest was 40% complete as of July 4, compared with 52% completed at the same time last year.   Cooxupe is Brazil's largest coffee cooperative and Brazil's largest exporter of coffee.

Also, Safras & Mercado recently reported that Brazil's 2025/26 coffee harvest was 35% complete as of June 11, slightly behind last year's comparable level of 37% but in line with the 5-year average of 35%.  The breakdown showed that 49% of the robusta harvest and 26% of the arabica harvest were complete as of June 11.

Coffee prices have retreated over the past two months as the outlook for abundant coffee supplies undercut prices.  On June 25, the USDA's Foreign Agricultural Service (FAS) forecasted that Brazil's 2025/26 coffee production will increase by 0.5% year-over-year (y/y) to 65 million bags and that Vietnam's 2025/26 coffee output will rise by 6.9% y/y to a 4-year high of 31 million bags.  Brazil is the world's largest producer of arabica coffee, and Vietnam is the world's largest producer of robusta coffee.

Robusta coffee prices have found support as ICE-monitored robusta coffee inventories declined to a 7-week low of 5,108 lots on June 26, although they have since rebounded to 5,270 lots as of today.  However, a bearish factor for arabica prices is that ICE-monitored arabica coffee inventories rose to a 5-month high of 892,468 bags on May 27 and were moderately below that high at 832,430 bags as of Tuesday.