The global coffee market is experiencing a period of heightened volatility, driven by fundamental supply disruptions, rising costs, and shifting trade policies. Since mid-2024, producers, exporters, and traders across major origins—such as India, Vietnam, and Brazil—have confronted immense challenges. Vietnamese exports have dropped in volume but skyrocketed in value, highlighting the acute supply tightness that continues to propel Robusta futures to historic highs. Brazil’s exports have fallen sharply due to delayed harvests and adverse weather, adding further bullish fuel to prices. In India, exporters like Allana Consumer Products Ltd. are bracing for a modest decline in shipments, prioritising margins over revenue while navigating tariffs that have curtailed competitiveness in the US market. Despite a projected rise in India’s 2025–26 output, the market view remains cautious given untimely rains and concerns over crop yields.
Consumers worldwide are feeling the impact, with retail and wholesale coffee prices repeatedly hitting new peaks. The surge in prices affects every link in the value chain—growers face rising input costs and climate unpredictability, while roasters and retailers debate passing on further cost increases. The recent narrowing of the speciality premium reflects the overall stress and the growing importance of weather, logistics, and speculative flows. As bullish sentiment dominates the market, stakeholders should watch for ongoing weather risks in Brazil and India, exchange-driven speculative activity, shifts in US and EU tariffs, and changes in global consumer demand patterns.
📈 Prices: Key Exchange Closes & Trends
| Exchange/Product | Latest Price | Weekly Change | Market Sentiment |
|---|---|---|---|
| London ICE (Robusta July 2025) | 5,291 USD/ton | +3.2% | Bullish |
| New York ICE (Arabica July 2025) | 8,560 USD/ton | +2.7% | Bullish |
| Vietnam (Central Highlands, Robusta Spot) | 130,000 VND/kg (~5,100 USD/ton) | +4.1% | Very Bullish |
| ICO Composite | 335.76 US¢/lb | -3.5% | Neutral/Bearish |
Indian retail/wholesale: Arabica parchment $4.55–$5.00/kg, Robusta parchment $4.43–$4.55/kg, both up over 33% YoY【6:16†full-posts-2024.json】【6:12†full-posts-2025.json】.
🌍 Supply & Demand Update
- India: 2025–26 production forecast at 403,000 tonnes (up from 363,000 tonnes), but risks from irregular rainfall persist. Export projection for 2024–25 revised down to 22,000–25,000 tonnes (Allana), with strong demand from the Middle East, North Africa, Europe, and Southeast Asia. US-bound exports minimize further on tariff changes【6:0†full-posts-2025.json】.
- Vietnam: Jan–Apr 2025 exports down 10% YoY at 663,000 tonnes, value up 51% to $3.8bn; average price hits $5,698/ton. Vietnamese Robusta supply remains tight【6:12†full-posts-2025.json】.
- Brazil: April 2025 green coffee exports down 31.9% YoY. Stockpiling and delayed harvests, weather events, and logistical bottlenecks keep supply tight.
- Consumption: Rising domestic demand in India and robust buying in Europe and Asia underpin firm global demand.
📊 Market Fundamentals & Drivers
- 🌦️ Weather Impact: Recurrent droughts and heavy rains in India (Kodagu, Chikkamagaluru, Hassan, Wayanad)—pre-monsoon deficits and heat stress have impaired arabica yields and raised pest pressure【6:15†full-posts-2024.json】. Brazil faces dry weather, risking flowering and bean fill, while Vietnam experienced a typhoon; robustas especially threatened【6:18†full-posts-2024.json】.
- 📑 USDA/ICO Reports: India’s 2024–25 output seen flat/slightly lower at 6 million 60-kg bags; global production for 2024–25 forecasted at 176.2 million bags—a rebound led by Brazil/Indonesia【6:2†full-posts-2024.json】【6:3†full-posts-2025.json】.
- 💸 Speculation & Positioning: Fund activity has amplified volatility on both ICE and London exchanges. Robusta futures attract bullish speculative flows amid tight physicals【6:12†full-posts-2025.json】.
- 📉 Tariff & Policy Shifts: US imposes 26% duty on Indian instant coffee (vs. 10% for Brazil/Ecuador), realigning global trade flows and dampening US-bound Indian exports【6:1†full-posts-2025.json】.
- 💰 Input Costs: Fertilizer, labor, and energy costs hit growers hard in India, compressing farm margins despite high prices【6:5†full-posts-2024.json】【6:14†full-posts-2024.json】.
⛅ Weather Outlook for Major Producers (June–July 2025)
- India: Erratic monsoon, rainfall deficits of 40–58% in key districts. Anticipate further yield stress, risk of white stem borer in arabica, and quality issues from off-season rains【6:15†full-posts-2024.json】【6:2†full-posts-2024.json】.
- Brazil: Persistent dryness; risk to flowering and bean development, and possibility of lower yields if July stays dry【6:18†full-posts-2024.json】.
- Vietnam: Typhoon Yagi caused localized losses in Central Highlands; recent rains have improved outlook, but earlier dry spell caps yield potential.
🌏 World Production & Stock Comparison (2024–25, mn bags of 60kg)
| Country | Production | Stocks (open 24–25) | Exports |
|---|---|---|---|
| Brazil | 69.9 | ~9.5 | 39.5 |
| Vietnam | 29.0 | ~3.2 | 27.5 |
| Colombia | 12.4 | ~0.7 | 11.9 |
| Indonesia | 10.9 | ~0.6 | 7.5 |
| India | ~6.0 | ~0.8 | 4.2 |
| World | 176.2 | 35.2 | 123.1 |
🔔 Trading Outlook & Recommendations
- Producers: Consider forward sales on current highs, but maintain some inventory in case of further price rallies. Watch monsoon progress in India for yield developments.
- Buyers: Secure spot supply where possible—as further upside pressure possible with continuing volatility. Monitor weather and export policy interventions.
- Exporters: Diversify destination markets away from the US to offset tariff impacts; explore hedging strategies amid historic price swings.
- Roasters/Brands: Assess cost pass-through options carefully; revisit origin strategies as specialty premium narrows and global pricing remains volatile.
- Traders: Watch speculative flows, especially in Robusta. Stay attuned to news from Brazil and Vietnam—crop and currency developments could spark sharp moves.
📆 3-Day Price Forecast (Key Exchanges)
| Exchange | Product | Expected Range (3 days) | Sentiment |
|---|---|---|---|
| London ICE | Robusta July 2025 | 5,200–5,350 USD/ton | Bullish |
| New York ICE | Arabica July 2025 | 8,300–8,650 USD/ton | Bullish, with risk of spikes on further adverse weather |
| Vietnam (Spot) | Robusta | 128,000–133,000 VND/kg | Very Bullish |
| India (Spot) | Arabica/Robusta | 4.50–5.10 USD/kg | Bullish |
Consensus: Continued volatility with upside risks; traders remain alert as weather and policy signals could spark further price action.
