The global coffee market in mid-2025 is witnessing extraordinary volatility, driven by a historic squeeze in supplies and record-breaking consumer demand. Brazil’s Arabica farms continue to recover from years of drought, while Vietnam—the main Robusta supplier—struggles amidst repeated typhoons and slow crop recovery. This combination of tightening supply and growing global thirst for coffee, especially in emerging economies like China and India, has created the most bullish price environment seen in decades.
The imbalance between lagging production and accelerating consumption is fueling both panic buying and strategic stockpiling. Major futures exchanges in New York and London are registering historic highs for both Arabica and Robusta contracts, with physical coffee in Vietnam and India trading at multiples of last year’s prices. Export values in key markets, such as Vietnam, are up over 50% on just a 10% reduction in volume—an indication of the extraordinary tightness in the supply chain. Downstream, consumers are bracing for price hikes as roasters, traders, and retailers scramble to pass on soaring raw bean costs.
Complicating the landscape are new trade policies and supply chain disruptions. With inventories shrinking and weather still a wildcard in Brazil and Southeast Asia, both risk and reward are elevated for stakeholders across the supply chain. All eyes are now on the weather and export flows in coming weeks as the market’s next move could be sharp and sudden.
📈 Prices: Latest Exchange Data
| Exchange | 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 |
| India (Raw Arabica) | Spot | USD 6.60/kg | +14% | Bullish |
🌍 Supply & Demand Drivers
- Vietnam: Jan–Apr 2025 exports down 9.45% YoY to 665,800 tons, but export value up 51% to $3.75bn; average price now $5,646/ton (+66% YoY). Imports from Germany & US surge by 17%+.
- Brazil: Green coffee exports in April 2025 sharply down 31.9% YoY, reflecting prior drought impacts.
- India: Farmgate prices for Arabica and Robusta up 64% and 24%. Domestic demand at record highs; premium blends expected to soon cross $12/kg for consumers.
- Inventory: Global stocks are at multi-year lows as strategic holders delay sales, fueling ongoing price rallies.
- Demand: Robust growth in consumption, especially in China and India, keeps supply deficits unresolved.
📊 Fundamentals: Market Structure and Trends
- Speculative funds, anticipating further weather disruptions, add to bullish market momentum.
- New US and EU tariffs are shifting trade flows—India and Brazil readjust market strategies to counter US taxes favoring South America over Asia.
- Physical market shortages persist, with spot prices in major producing regions at record levels.
🌦️ Weather Outlook: Key Coffee Regions
- Brazil Coffee Belt: Forecasts show partial improvement with above-average rainfall, supporting flower and fruit development, but fungal disease risk is elevated. Historic drought impacts still limit yield recovery. Next two weeks: mild temperatures, scattered showers—generally favorable, but risk of extreme weather remains high.
- Vietnam Central Highlands: Seasonally favorable with mild temps and adequate rainfall this week, but recovery is hampered by typhoon damage to plantations; yield rebound will require several crop cycles.
- India: Pre-monsoon rains have improved crop outlook, but supply-side pressures and recent strong winds point to ongoing local tightness for the remainder of 2025.
🌍 Production & Stock Levels: Global Comparison
- Brazil (2025/26): Arabica output still well below pre-drought averages. Green coffee exports -31.9% YoY last month.
- Vietnam (2025): Robusta output down ~10% YoY; exports by volume down but by value up >50% on sharply higher prices.
- India: Production for 2025/26 seen at 6 million 60-kg bags. Domestic use up to 1.4 million bags; rest exported.
- Inventories: London and New York certified stocks diverge, with Robusta falling and Arabica stabilizing from lows; spot shortages drive up physical premiums.
📌 Trading Outlook & Recommendations
- Producers: Sell on rallies; lock in high prices via forward contracts.
- Importers/Roasters: Secure supplies immediately, hedge price risk—spot and future markets show ongoing risk of price spikes.
- Traders: Watch for weather news and export flow updates—potential for further upside if adverse weather persists.
- Consumers/Brands: Budget for additional cost increases; consider strategic purchases ahead of further hikes.
📆 3-Day Regional Price Forecast
| Exchange/Region | Product | Current Price | 3-Day Forecast | Market Sentiment |
|---|---|---|---|---|
| ICE NY | Arabica (July 2025) | USD 2.24/lb | USD 2.20–2.30/lb | Bullish |
| ICE Europe | Robusta (July 2025) | USD 4,370/ton | USD 4,350–4,500/ton | Strongly Bullish |
| Vietnam (Hanoi) | Robusta (Spot) | USD 5,650/ton | USD 5,600–5,750/ton | Very Bullish |
| India (Raw Arabica) | Spot | USD 6.60/kg | USD 6.50–6.80/kg | Bullish |
