
Jan 17
/
Laleska Moda
Will coffee prices continue to rise in 2025?
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- The year of 2024 was marked by high coffee price volatility, with both Arabica and Robusta futures reaching record highs. In 2025, however, coffee prices are expected to remain volatile due to supply-related factors.
- While last year Robusta dictated most of the price behavior, this year Arabica is expected to have a greater impact on prices.
- The pressure on Robusta should ease with the gradual arrival of the Vietnamese 24/25 crop in the market and better prospects for the Brazilian conilon in 25/26.
- Uncertainty over the Brazilian 25/26 arabica crop has pushed up prices for the variety and widened the arbitrage between arabica and robusta futures, which could influence demand preferences in 2025.
- Given the expected deficit in 24/25 and the uncertainties surrounding 25/26 Brazil crop, prices are likely to remain more sensitive to supply fluctuations.
Will coffee prices continue to rise in 2025?
After high volatility in 2024, coffee prices have been more consistent at the start of 2025, as many traders return to the market after the holiday season and wait for new fundamentals. Despite the relative calm so far, next year could still see high volatility, but while Robusta was the focus for most of 2024, Arabica should have a greater impact on prices in 2025.
It's worth remembering that last year, lower robusta production in Brazil and especially Vietnam drove its futures prices to record levels. This was because, in addition to lower volumes in 23/24, production in the Asian country had already been reduced for a couple of seasons, taking domestic stocks to their lowest level and limiting the country's exports (see our previous report). In addition, high temperatures and drought in the first half of 2024 triggered concerns for Vietnamese production in 24/25, while harvest was delayed, pushing futures contracts to new highs in September/24.
However, the focus in recent months has been on Brazilian Arabica supply in 25/26. With the country's grain filling period taking place in the first quarter of 2025, there is still disagreement over the actual size of the next season, which will dictate the direction of prices this year. The rains after October/24 have helped grain filling and could still have a positive impact on 25/26, at least in terms of bean size and quality. However, more accurate estimates are unlikely to reach the market until the end of February, after the filling period.
LN – Robusta (USD/mt), NY – Arabica and Arbitrage (c/lb)

Source: Refinitiv
Brazil: Cumulative Precipitation (mm)

Source: Refinitv, Hedgepoint
In addition, Vietnamese coffee is starting to reach the market, albeit more slowly than in recent years, while the outlook for Brazilian conilon in 25/26 is more positive, reducing the pressure on robusta prices.
Indeed, it's interesting to note that since October the arbitrage between arabica and robusta contracts has increased, reaching the 100 c/lb level, which was not seen since 2022.. With uncertainties surrounding arabica this year, we expect the arbitrage to widen further, which could also increase demand for robusta in the 24/25 cycle - we previously expected a decline due to the narrower arbitrage with arabica.
As a result, we expect robusta futures to retain some support, but to remain below the record levels of 2024. For Arabica, however, there is still room to test new highs depending on the outlook for the Brazilian 25/26 crop, especially after futures approached the 350 c/lb level in December.
Coffee Global Balance (M bags)

Source: Hedgepoint
It's worth remembering that we expect 24/25 to end with a new deficit. While demand for coffee has maintained a more inelastic behavior regarding prices, with slight annual growth in recent years, global production has faced problems. This has led to historically low global stocks between 2023 and 2024, increasing the sensitivity of prices to fluctuations in production. Even with a possible negative impact of current price levels on demand, supply will remain a point of support.
Furthermore, with most producers well capitalized and willing to wait for higher prices to negotiate, coffee prices should continue to find support in the coming months, at least until the new Brazilian crop enters the market.
Arabica Ending Stocks (M bags)

Source: Hedgepoint
Robusta Ending Stocks (M bags)

Source: Hedgepoint
In Summary
In recent years, world coffee harvests have been characterized by supply problems, as demand has continued to grow, leading to deficits in recent cycles and reductions in bean stocks, both at origin and destinations.
This situation, combined with the uncertainties surrounding the Brazilian Arabica crop for 25/26, could continue to support prices, at least until the start of the harvest. It's worth remembering that producers are not only well capitalized but, in the case of the Brazilians, have already sold most of the 24/25 crop, which should limit the supply of country’s beans in the coming months and lead to further rises.
In the case of robusta, the supply of Brazilian grains may also be limited in early 2025 due to the high-level of 24/25 crop selling. However, as Vietnam's 24/25 harvest progresses, the supply of Vietnamese grains has increased, reducing pressure on robusta futures and increasing the arbitrage between Arabica and this variety. In addition, higher Brazilian conilon production is expected in 25/26, which could keep robusta contracts below the record levels seen in 2024.
Weekly Report — Coffee
Written by Laleska Moda
laleska.moda@hedgepointglobal.com
Reviewed by Lívea Coda
livea.coda@hedgepointglobal.com
livea.coda@hedgepointglobal.com
www.hedgepointglobal.com
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