Brazil’s Coffee Harvest Pressures Prices as Global Supply Builds

Coffee prices are falling fast as harvest activity in Brazil, the world’s top coffee producer, picks up speed. The rising supply is causing concern among traders and putting downward pressure on both arabica and robusta markets.

Brazil’s Rapid Coffee Harvest Boosts Supply

Brazil’s largest coffee cooperative, Cooxupé, reported that 67% of its members’ coffee harvest was completed as of July 25. This signals strong progress, especially as the country pushes through the 2025/26 harvest season.

According to Safras & Mercado, Brazil’s total harvest reached 84% completion by July 23. This is ahead of the 81% level recorded at the same time last year and well above the five-year average of 77%. The robusta harvest is nearly finished at 96%, while arabica is 76% complete.

Global Coffee Prices Dip on Strong Output Expectations

Over the past three months, coffee prices have declined due to expectations of abundant global supply. Arabica prices dropped to their lowest in eight months, and robusta fell to a 1.25-year low.

In its latest report, the USDA’s Foreign Agricultural Service forecasted Brazil’s 2025/26 coffee output to grow by 0.5% to 65 million bags. Vietnam, the top producer of robusta, is expected to boost output by 6.9% to 31 million bags, the highest in four years.

Weather Conditions Add More Pressure

Recent rain in Brazil has improved growing conditions and reduced concerns about dryness. Somar Meteorologia reported that Minas Gerais, Brazil’s key arabica-producing area, received 3.5 mm of rain during the week ending July 26—over 200% above the historical average. This development further weighs on coffee prices, as it supports healthy crop growth.

Trade Uncertainty and Market Speculation in Focus

While harvest progress suggests strong supply, uncertainty around trade could trigger price volatility. The U.S. has warned of a 50% tariff on Brazilian goods if a new trade agreement isn’t reached by Friday. This could raise coffee prices significantly and limit exports from Brazil.

On the trading side, ICE Futures Europe reported that funds increased their net short positions in robusta coffee by 3,334 contracts, reaching a two-year high of 4,628 short positions. This raises the chance of a sharp rebound if traders begin covering those shorts.

Inventories Send Mixed Signals

Robusta inventories rose to a 1-year high of 7,029 lots on July 22, indicating strong supply. However, arabica coffee stocks dropped to a 3.25-month low of 800,326 bags, showing possible tightness in that segment.

Lower Exports from Brazil and Vietnam Support Prices Slightly

Brazil’s coffee exports fell sharply in June. According to Cecafe, total green coffee exports dropped 31% year-over-year to 2.3 million bags. Arabica shipments declined by 27%, and robusta fell by 42%, offering some mild price support.

In Vietnam, drought led to a 20% fall in 2023/24 production, the country’s smallest crop in four years. Coffee exports dropped 17.1% to 1.35 million metric tons. Earlier in March, the Vietnam Coffee and Cocoa Association lowered its 2024/25 production forecast from 28 million to 26.5 million bags. However, more recent data from the Vietnam National Statistics Office shows a small rebound, with exports from January to June 2025 up 4.1% year-over-year.

USDA and Volcafe Outlook: Mixed Global Signals

The USDA’s June report forecasts a 2.5% increase in world coffee production for 2025/26, reaching a record 178.68 million bags. While arabica production is set to fall 1.7%, robusta is expected to rise by 7.9%. Global ending stocks are projected to grow by 4.9% to 22.82 million bags.

Still, Volcafe warns of a deepening arabica deficit. The firm predicts a shortfall of 8.5 million bags for 2025/26—larger than last year’s 5.5 million deficit—and marks the fifth straight year of arabica supply shortages.

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