The global coffee market is in the grip of a volatility storm, with prices defying broader soft commodity trends and remaining highly reactive to fast-changing fundamentals. As of mid-September, coffee prices have surged almost 30% year-to-date, outpacing most agricultural indices. This bullish run is being fueled by persistent concerns over US trade tariffs and erratic weather patterns in Brazil and Vietnam, the world’s top two exporters. A fierce cocktail of shrinking certified stocks, speculative trading, and geopolitical risks has further heightened market sensitivity. Market participants remain on edge, knowing that a single rainfall event in Brazil or a shift in US tariff policy could trigger sizable moves in either direction.
Additional uncertainty surrounds Vietnam, where the looming threat from super typhoon Ragaasa could impact the upcoming robusta harvest, while India is on the cusp of a record crop but remains exposed to both weather volatility and policy headwinds. With US administration tariff exemptions under consideration and intermittent rainfall during Brazil’s crucial flowering season, the near-term outlook is both combustible and highly speculative. In the background, global certified stocks are continuing a steep decline, underlining fears of a potential supply squeeze should weather disappointments persist in the months ahead. In summary, the coffee trade faces a uniquely dynamic mix of macro-, policy-, and climate-related risks, and only nimble, data-driven strategy can keep pace with this unprecedented market environment.
📈 Prices: Latest Exchange Data
| Exchange / Market | Contract | Closing Price | Weekly Change | Market Sentiment |
|---|---|---|---|---|
| ICE NY (Arabica) | July 2025 | USD 2.24 / lb | +3.2% | Bullish |
| ICE Europe (Robusta) | July 2025 | USD 4,370 / ton | +5.6% | Strongly Bullish |
| Hanoi (Physical, Robusta) | Spot | USD 5,650 / ton | +4.8% | Bullish |
| London ICE | Robusta (July 2025) | USD 5,291 / ton | +3.2% | Bullish |
| New York ICE | Arabica (July 2025) | USD 8,560 / ton* | +2.7% | Bullish |
| Vietnam (Central Highlands) | Robusta (Spot) | 130,000 VND / kg (~USD 5,100 / ton) | +4.1% | Very Bullish |
*Note: USD/ton price for Arabica as per local closing — check for conversion clarifications.
🌍 Supply & Demand Drivers
- Bullish: US tariffs on Brazilian and Indian coffee, plus risks around possible exemption reversals, have choked US-bound supply and supported rallying prices.
- Weather: Drought and irregular rains in Brazil threaten the crucial September–November flowering. If rainfall disappoints, 2025’s crop outlook could deteriorate further.
- Vietnam: Super typhoon Ragaasa threatens robusta ahead of harvest; export volumes down 9.5% YoY January–April, but export values up 52% due to price surges.
- Certified Stocks: Global certified coffee stocks have dropped from over 1 million bags to 650,000, intensifying supply tightness.
- India: Coffee Board forecasts a record 403,000 tons in 2025–26 (+11% YoY); yet farmgate sales remain subdued as growers withhold beans hoping for higher prices.
- Speculation: Fund positioning and technical trading have amplified volatility, with large swings often following tariff rumors or weather updates.
📊 Fundamentals: Production & Stocks Comparison
| Country | 2023–2024 Output (’000 t) | 2024–2025 Output (est., ’000 t) | Stock Trend |
|---|---|---|---|
| Brazil | 3,055 | 3,200 (proj.) | Falling Dry weather risk |
| Vietnam | 1,460 | 1,600 (proj.) | Sharply lower stocks Farmers withholding |
| India | 363 | 403 (bloom est.) | Steady to higher But slow sales |
| Colombia | 858 | 870 (proj.) | Stable–slightly lower |
| World (ICO) | Estimated 10,400 | 10,800 (proj.) | Certified stocks -40% YoY |
Key point: Market remains dominated by fears of tightening physical supply, especially in robusta.
⛅ Weather Outlook: Brazil & Vietnam
- Brazil: Persistent dryness and higher-than-average temperatures continue to threaten Minas Gerais, São Paulo, and Espírito Santo. While isolated rains are forecast into late September, most coffee areas are still parched during critical flowering.
- Vietnam: Typhoon Ragaasa has battered key robusta regions, and above-normal rains are forecast through October, increasing risks for the upcoming harvest.
- India: Timely monsoon rains have stabilized the post-blossom situation, but any gap in showers before November would revive yield concerns.
Market implication: If Brazil’s spring rains remain light, world arabica supply risks a sharp downgrade for 2025. Vietnam faces potential crop losses if typhoon-related flooding persists.
📌 Market Drivers & Comparison to Previous Cycle
- Compared to previous reports: Volatility is higher as both macro (tariffs, currency) and physical (weather, certified stocks) factors weigh on direction. Notably, Vietnam’s export revenue has surged despite falling volume, underscoring just how price-driven this market is.
- BMI/Fitch Solutions note: 29.7% year-to-date price increase as of mid-September, outpacing most ag indices.
- India’s projected record crop is offset by slow sales and cautious grower sentiment, a contrast to earlier years where record output supported greater export flows.
- Markets remain highly reactive: rapid price corrections follow any indication that weather risk is softening, e.g., if Brazil rainfall improves later this autumn.
💡 Trading Outlook & Strategic Recommendations
- For producers: Consider selling into current rallies if local weather and crop quality permit; reserve a share for anticipated spikes if adverse weather persists.
- For buyers/roasters: Secure forward cover, especially for robusta, as global inventories stay low and shipping/logistics remain volatile.
- For traders/speculators: Monitor US policy updates, especially any announced tariff exemptions or changes; expect large intraday swings tied to Brazilian weather forecasts.
- Stakeholders: Prepare for a bumpy fourth quarter as the interplay of US tariffs, Brazilian rainfall, and Vietnam’s recovery from typhoon risk will keep sentiment skittish and prices extremely sensitive to new information.
📆 3-Day Price Forecast: Key Exchanges
| Exchange/Market | Current Price | 3-Day Forecast | Trend |
|---|---|---|---|
| ICE NY (Arabica) | USD 2.24 / lb | USD 2.20–2.35 / lb | High volatility, bullish bias |
| ICE London (Robusta) | USD 5,291 / ton | USD 5,200–5,400 / ton | Bullish—volatile on typhoon/weather |
| Vietnam (Physical, Robusta) | USD 5,650 / ton | USD 5,600–5,800 / ton | Firm, with potential for spikes |
Forecast note: Watch Brazil rainfall updates and US policy news closely—either factor could trigger rapid, substantial price corrections within days.
