December arabica espresso (KCZ25) on Monday closed down -12.90 (-3.20%), and November ICE robusta espresso (RMX25) closed down -134 (-2.93%).
Espresso costs on Monday prolonged the sharp declines seen late final week after arabica espresso final Thursday posted an 8.75-month nearest-futures excessive and robusta posted a 2-month excessive.
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Espresso costs fell on hopes for aid from US tariffs on Brazilian imports, together with espresso. Brazil’s President Luiz Inacio Lula da Silva mentioned Monday he had a “surprisingly good” assembly with President Trump on the sidelines of the ASEAN summit in Malaysia and that there could possibly be a “definitive answer” on US-Brazil commerce inside days. The thaw could also be associated to Brazil’s standing because the world’s second-largest producer of uncommon earth minerals, behind China.
Espresso costs fell regardless of Monday’s report from Somar Meteorologia that Brazil’s largest arabica coffee-growing space, Minas Gerais, obtained solely 0.3 mm of rain throughout the week ended October 24, or 1% of the historic common.
Robusta espresso was undercut by final Friday’s bearish forecast from the Vietnam Espresso and Cocoa Affiliation (Vicofa) that Vietnam’s espresso output in 2025/26 will likely be 10% larger than the earlier crop yr if climate circumstances stay favorable.
Espresso costs stay underpinned by concern that extreme dry circumstances in Brazil throughout the essential flowering interval for espresso timber will threaten the 2026/27 espresso crop. In response to the Bloomberg Brazil Climate Evaluation, coffee-producing areas in Brazil have been experiencing an intense drought, with the state of Minas Gerais recording solely about 70% of its common rainfall over the previous month.
Espresso costs are supported by 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 1.5-year low of 447,773 luggage final Friday, though they rebounded barely larger to 450,743 luggage on Monday. ICE robusta espresso inventories fell to a 3-month low of 6,122 tons on Monday. American consumers are voiding new contracts for Brazilian espresso purchases because of the 50% tariffs on US imports from Brazil, thereby tightening US provides, as a couple of third of America’s unroasted espresso comes from Brazil.
Espresso costs garnered help after the Nationwide Oceanic and Atmospheric Administration (NOAA) on September 16 elevated the chance to 71% of a La Niña climate system within the southern hemisphere from October to December, which might carry extreme dry climate to Brazil and hurt the 2026/27 espresso crop. Brazil is the world’s largest producer of arabica espresso.
Robusta espresso is underneath strain from elevated provides from Vietnam. The Vietnam Nationwide Statistics Workplace reported on October 13 that Vietnam’s Jan-Sep 2025 espresso exports rose +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 luggage, 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 and marketing yr (Oct-Aug) rose +0.2% y/y to 127.92 million luggage, indicating enough exports and provides.
Espresso costs discovered help after Conab, Brazil’s crop forecasting company, reduce its Brazil 2025 arabica espresso crop estimate on September 4 by -4.9% to 35.2 million luggage from a Could forecast of 37.0 million luggage. Conab additionally decreased its whole Brazil 2025 espresso manufacturing estimate by 0.9% to 55.2 million luggage, from a Could estimate of 55.7 million luggage.
The USDA’s Overseas Agriculture Service (FAS) projected on June 25 that world espresso manufacturing in 2025/26 will enhance by +2.5% y/y to a file 178.68 million luggage, with a -1.7% lower in arabica manufacturing to 97.022 million luggage and a +7.9% enhance in robusta manufacturing to 81.658 million luggage. FAS forecasted that Brazil’s 2025/26 espresso manufacturing will enhance by +0.5% y/y to 65 million luggage and that Vietnam’s 2025/26 espresso output will rise by 6.9% y/y to a 4-year excessive of 31 million luggage. FAS forecasts that 2025/26 ending shares will climb by +4.9% to 22.819 million luggage from 21.752 million luggage in 2024/25.
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