The closing coffee trade of the 15th week last week saw an impressive increase, especially for Robusta coffee.
The market closed with Arabica coffee for July up by 12 cents, reaching 353.60 cents/pound, and Robusta coffee for the same month closed up by $153, at 5049$/ton.
The two main reasons that pushed coffee prices higher, recovering what was lost earlier in the week, were the Trump administration’s announcement of maintaining the 10% import tariff on goods from 75 countries, with no retaliatory actions, along with the weakening of the USD, which triggered the liquidation of short positions.
It must be said that the decline of the Dollar Index to its lowest level in three years was the main factor driving the closing of previous short positions. Additionally, concerns about supply still threaten the market, as Cecafe reported on Wednesday that Brazil’s coffee export in March had dropped by 26% compared to the same period last year, falling to 2.95 million bags.
Brazil’s Coffee Exports Drop by 26% in March
Brazil’s coffee exports in March dropped by 26% compared to the same period last year.
Robusta coffee is also seeing a price increase due to signs of tighter supply after the amount of Robusta coffee stocks monitored by ICE fell to its lowest level in 6 weeks on Friday, reaching 4,253 lots.
Last Wednesday, Arabica coffee dropped to its lowest level in nearly 3 months due to concerns about global trade wars, which caused most commodities, including coffee, to decrease in price. Additionally, there are concerns that coffee demand will decrease as high tariffs impact U.S. consumers.
The Vietnam Coffee and Cocoa Association has lowered its 2024/25 Vietnam coffee production forecast to 26.5 million bags, down from the 28 million bags previously forecast in December, as announced on March 12. Finally, the Vietnam General Department of Customs reported on Friday that coffee exports from Vietnam during January to March 2025 dropped by 15.3% compared to the same period last year, totaling 495,780 tons. This is a significant decrease in Vietnam’s key export month following the 2024/25 harvest.
Trade data from the Indonesian government in Sumatra, the leading coffee-producing island in Indonesia, reported that Robusta coffee exports from the island in February reached 441,836 bags, up 793% compared to the same period last year. It is believed that favorable weather conditions and rising Robusta prices contributed to the sharp year-on-year increase in exports. This contributed to the island’s cumulative Robusta coffee exports during the first eleven months of the current 2024/2025 coffee season, which increased by 66.97% compared to the previous year, totaling 3,336,376 bags. The coffee season from April 2024 to March 2025 is nearing its end in the country, with 85% of the coffee being Robusta and the remaining 15% Arabica, with total exports expected to reach around 10.90 million bags.
The amount of Arabica coffee that has been classified and stored on the New York exchange is expected to increase by 7,371 bags last Thursday, reaching 785,559 bags.
The price spread between the July 2025 contract on the London and New York markets reached 124.10 cents per pound. This is quite large, favoring Arabica prices, but slightly reducing Robusta coffee prices. Traditionally, the price spread between the two markets has been around 90 cents, and the market tends to self-adjust when this spread exceeds the norm. Last year, the spread was between 31-35 cents, when Robusta coffee was hard to buy on the market.
With the current spread, there is hope for a market adjustment, where either Arabica prices will drop or Robusta prices will rise further, with the latter scenario seeming more likely.
In summary for the week, Arabica coffee closed at 353.60 cents, down from last week’s closing level of 363.30 cents, and lower than the opening price of the week. Technically, the Arabica market has not shown much improvement and remains in a weak position. The market needs to break the 362.50-cent mark to confirm a recovery.
Robusta coffee has shown signs of bouncing back from its lowest point since mid-January, especially as the market regained the psychological level of $5,000 per ton. However, due to fluctuations from various economic, political, and monetary factors, particularly tariff issues, the technical outlook for the Robusta market requires a rise and sustained position above $5,140 per ton to confirm a regained position