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Trade4go
Jul 11th, 2025
Original content
Brazil’s 2025/26 coffee harvest is progressing steadily, with leading Brazilian coffee cooperative Cooperativa Regional de Cafeicultores em Guaxupé (Cooxupé) reporting about 40% completion as of July 4, slightly lagging behind last year’s pace of 52%. This development, combined with favorable weather and minimal frost risk, is accelerating harvest pace in key growing regions. As a result, global Arabica futures dropped to 7.5-month lows this week, while Robusta prices continued to weaken. Although the depreciated real offers some export competitiveness, the near-term sentiment remains bearish, driven by short-term supply pressure.
Brazil’s food supply agency, Companhia Nacional de Abastecimento (CONAB), raised its 2025/26 coffee production forecast to 55.7 million 60-kilogram bags, up 2.7% year-on-year (YoY), largely due to a strong Robusta crop. However, Arabica output is still expected to contract 6.6% from the previous season. Industry experts at a recent summit cautioned that Brazil alone cannot quickly rebuild depleted global coffee inventories, noting that it will likely take two consecutive strong crops to rebalance stocks. This highlights a transitional year for the global market, where improving Brazilian output may stabilize supply but not restore long-term equilibrium.
A new investigation in W27 by the Business & Human Rights Resource Centre spotlighted deteriorating working conditions on Rainforest Alliance-certified coffee farms in Colombia. Reports cited overcrowded accommodations, poor sanitation, and informal labor arrangements, contradicting the ethical claims tied to certification. This has sparked concern across importing countries, particularly in Europe, where traceability and labor compliance are central to procurement. The reputational and market access risks linked to social non-compliance are rising, even as Colombia continues to pursue quality-driven export growth.
Colombia's production remains unstable due to erratic weather patterns. Projections for 2025/26 suggest only a modest recovery to around 12.5 million bags. Rainfall variability and poor flowering have disrupted yields, especially in the central and southern coffee zones. While the country maintains its reputation for high-quality Arabica, production uncertainty continues to constrain its export volumes, limiting its ability to capitalize on elevated global demand for premium origins.
Vietnamese Robusta exports continue to improve: export revenues hit USD 5.5 billion in H1-2025, surpassing the government’s full-year target in just six months, with expectations to reach USD 7.5 billion by year-end. Despite this export boom, domestic farmgate prices have softened, and global benchmark prices have recently dipped, pressuring smallholder margins. Industry experts note that the cash-flow boost from record export revenue is partially offset by weak domestic prices, potentially leading to deferred replanting or reduced input investment. With exports strong but price signals mixed, the sector enters a critical juncture, balancing export momentum with farm-level sustainability.
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In W27, Brazilian wholesale coffee prices dropped to USD 12.41 per kilogram (kg), a 3.95% week-on-week (WoW) decline due to accelerating harvest progress and ample stock availability. Brazil’s 2025/26 coffee harvest has entered a phase of accelerated execution, particularly in Minas Gerais, Espírito Santo, and São Paulo, the country’s principal growing regions. As of the first week of July, major cooperatives such as Cooxupé reported that approximately 40% of the Arabica crop had been harvested, closing the gap on the previous year’s 52% progress at the same point.
Given the trend, wholesale prices are likely to soften further into the next week amid sustained supply flow from the southern harvest. Unless demand picks up sharply, expect Arabica prices to remain under pressure, hovering near current lows. A slight reprieve may occur if dryness returns in key zones or Brazil’s real depreciates, but current supply dynamics point to potential additional downward movement.
In W27, wholesale prices continued trending upward, reaching USD 12.20/kg, up 2.26% WoW and 59.06% YoY. This bullish trend is primarily driven by shrinking domestic supply amid declining production levels
Wholesale Colombian Arabica is projected to stabilize, assuming no major supply shocks. Traders anticipate potential consolidation driven by domestic buyers rotating coverage into the midyear crop. Unless global macro triggers emerge, prices may see modest recovery next week, supported by retention strategies among producers.
Wholesale coffee prices remained stable at USD 3.64/kg in W27, relatively flat compared to USD 3.62/kg in W26. However, prices remain low compared to the previous year, down 23.21%, driven by a combination of external price pressure and an oversupplied domestic market. The domestic price weakness persists despite strong export volumes. According to Vietnam's Ministry of Agriculture and Rural Development, coffee exports reached USD 5.5 billion in the first half of 2025, already exceeding full-year 2024 earnings. However, this export success has failed to translate into higher local prices due to contractual lags (many exports were booked months earlier at higher prices) and the absence of strong new buying interest from overseas buyers. Moreover, many Vietnamese farmers and local traders, anticipating further price drops, have rushed to sell inventories, amplifying downward pressure on spot prices.
Wholesale Robusta is expected to hover near current lows unless export demand re-accelerates. Given the looming high domestic supply and tempered global appetite, prices might remain range-bound, with upside risk minimal. If international markets rally, next week could see slight gains, but a broader rebound is unlikely without external demand catalysts.
Given the accelerating harvest in Brazil and robust export volumes in Vietnam, combined with weakening global prices, exporters and cooperatives should consider hedging future sales through forward contracts or options to protect margins. With prices near seasonal or multi-month lows, locking in contracts for Q3 and Q4-2025 can minimize downside exposure, especially if another large crop from Brazil or Indonesia further depresses prices. In Vietnam, exporters holding inventory may also consider blending strategies or shorter contract tenors to maintain competitiveness while cushioning against further spot price declines.
With shrinking international premiums and labor scrutiny weighing on Colombia’s brand value, exporters and cooperatives should invest in transparent certification audits, traceability platforms, and direct trade relationships with buyers. Restoring buyer confidence, particularly among European roasters, requires proactive storytelling and third-party verification of labor standards and quality. This is also an opportunity to diversify premium channels, including specialty micro-lots and value-added roasted coffee for domestic and regional markets, where ethical sourcing is increasingly valued.
Farmers and cooperatives in Vietnam facing margin compression should adopt a cost-containment approach in the short term. With local prices at 2025 lows, reinvestment in inputs (e.g., fertilizers, irrigation) or replanting may not yield sufficient return on investment (ROI) unless prices recover. Instead, stakeholders can prioritize maintenance and selective pruning and explore input credit programs or agronomic partnerships to reduce upfront costs. Waiting for better price signals in Q4-2025 may prove more efficient for long-term farm viability.
Sources: Tridge, Nasdaq, Reuters, Business and Human Rights Resource Centre, IandM Smith, ADM Investor Services
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