December arabica espresso (KCZ25) on Wednesday closed up +7.30 (+1.77%), and November ICE robusta espresso (RMX25) closed up +119 (+2.58%).
Espresso costs prolonged this week’s rally on Wednesday to 5-week highs. Espresso costs have assist from shrinking ICE espresso inventories. The 50% tariffs imposed on US imports from Brazil have led to a pointy drawdown in ICE espresso inventories. ICE-monitored arabica inventories fell to a 19-month low of 465,910 baggage on Wednesday, and ICE robusta espresso inventories fell to a 3-month low of 6,141 tons. American patrons are voiding new contracts for purchases of Brazilian espresso beans as a result of 50% tariffs imposed on US imports from Brazil, thereby tightening US provides, as a few third of America’s unroasted espresso comes from Brazil.
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Robusta espresso additionally has assist on considerations concerning the espresso crop in Vietnam, the world’s largest producer of robusta espresso. Vietnam’s climate workplace mentioned Wednesday that heavy rain from Tropical Storm Fengshen may trigger flash floods and landslides, in addition to injury espresso crops in Vietnam’s Central Highlands, the nation’s important coffee-producing area.
Espresso costs additionally garnered assist after the Nationwide Oceanic and Atmospheric Administration (NOAA) on September 16 elevated the chance of a La Niña climate system within the southern hemisphere from October to December to 71%, which may carry extreme dry climate to Brazil and hurt the 2026/27 espresso crop. Brazil is the world’s largest producer of arabica espresso.
Hopes that fifty% tariffs on Brazilian items will quickly be eliminated are unfavorable for espresso costs. Final Thursday, US Commerce Consultant Greer mentioned he and Secretary of State Rubio had “very constructive talks” relating to commerce with Brazilian Minister of International Affairs Vieira. Each side mentioned they are going to schedule a gathering between President Trump and President Lulu on the earliest attainable event.
An easing of dry situations in Brazil is bearish for espresso costs. Somar Meteorologia reported Monday that Brazil’s largest arabica coffee-growing space, Minas Gerais, acquired 44.7 mm of rain in the course of the week ended October 18, or 136% of the historic common.
Robusta espresso can be underneath stress on account of a rise in espresso provides from Vietnam. The Vietnam Nationwide Statistics Workplace reported Monday that Vietnam’s Jan-Sep 2025 espresso exports had been up +10.9% y/y to 1.230 MMT. Additionally, Vietnam’s 2025/26 espresso manufacturing is projected to climb +6% y/y to 1.76 MMT, or 29.4 million baggage, a 4-year excessive. Vietnam is the world’s largest producer of robusta espresso.
Bigger espresso exports are bearish for costs after the Worldwide Espresso Group (ICO) reported on October 6 that world espresso exports for the present advertising 12 months (Oct-Aug) rose +0.2% y/y to 127.92 million baggage, indicating enough exports and provides.
Espresso costs discovered assist after Conab, Brazil’s crop forecasting company, lower its Brazil 2025 arabica espresso crop estimate on September 4 by -4.9% to 35.2 million baggage from a Might forecast of 37.0 million baggage. Conab additionally diminished its complete Brazil 2025 espresso manufacturing estimate by 0.9% to 55.2 million baggage, from a Might estimate of 55.7 million baggage.
The USDA’s International Agriculture Service (FAS) projected on June 25 that world espresso manufacturing in 2025/26 will enhance by +2.5% y/y to a document 178.68 million baggage, with a -1.7% lower in arabica manufacturing to 97.022 million baggage and a +7.9% enhance in robusta manufacturing to 81.658 million baggage. FAS forecasted that Brazil’s 2025/26 espresso manufacturing will enhance by +0.5% y/y to 65 million baggage and that Vietnam’s 2025/26 espresso output will rise by 6.9% y/y to a 4-year excessive of 31 million baggage. FAS forecasts that 2025/26 ending shares will climb by +4.9% to 22.819 million baggage from 21.752 million baggage in 2024/25. Nevertheless, Volcafe is projecting a worldwide 2025/26 arabica espresso deficit of -8.5 million baggage, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive 12 months of deficits.
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