Sep 16 / Laleska Moda

From Tight Supplies to Blooming Prospects

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  • The Arabica’s December contract has been trading around 280-290 c/lb in recent days, although the overall setup is still bearish, especially given the current Brazilian weather outlook and exports.

  • Brazil's total coffee exports reached 4.16 M bags in August, a new record volume for the month and 31% above the 2025 level. Green coffee shipments totaled 3.8 M bags, also an increase of 31% in one year. 

  • Weather in the country has also been favorable for the 27/28 season development, with some regions already registering the first flowering of the cycle. September cumulative precipitation has already surpassed the 10-year average.  

  • On the Rousta side, Vietnam exports continue above average levels in August, helping with the short-term supply outlook, although stocks in the country are now extremely low, likely limiting the next month's shipments. Some farmers expect the 26/27 season harvest to start in early October, but a larger volume of coffee will likely reach the market after November. 

From Tight Supplies to Blooming Prospects 

Arabica futures price movements have been sluggish lately, trading around 280-290 c/lb, although the market has room for further decreases, given the improving supply outlook. While certified stocks continue their lowest levels in decades, giving some support to prices, the current Brazilian weather outlook and exports could increase the bearish pressure in the next few days, with the December contract potentially slipping below 280 c/lb.    
Last week, Cecafé data indicated that Brazil exported 4.16 M bags of coffee (green and industrialized) in August, an increase of 31% in one year and a new record for the month. Considering green coffee, shipments totaled 3.8 M bags, up 31.1% year-on-year, and a sharp rise of 42.7% compared to July. From this, Arabica exports had an increase of over 1 M bags in the month, to 2.8 M bags, up 25.7% compared to August 2025. Meanwhile, Conilon shipments reached their highest volume in history, at 953.5 thousand bags, rising 53.6% in one year.  

This performance helped to decrease fears over short-term supply, especially given the lower Brazilian farmer sales and exports in recent months, indicating that Brazilian coffee is finally reaching destinations. Interestingly, the two biggest importers of Brazilian coffee in August were the U.S. and Belgium, both with over half a million bags. Although these two countries are normally among the top 5 importers, the year-over-year and monthly increase in coffee exports to these destinations comes after news of major companies in the sector sending around 300 k bags of Arabica coffee to certified stocks, increasing the perspectives of more coffee reaching U.S. and Antwerp warehouses. For now, the ICE certified stock report indicates that 63.9 thousand bags of Brazilian coffee are waiting for grading in the Antwerp warehouse, but these figures could increase in the next few days (see the report here).

 Brazil: Arabica Green Coffee Exports (M bags)

Source: Cecafé

Brazil: Conilon Green Coffee Exports (‘000 bags)

Source: Cecafé

Beyond the increase in exports, with the 26/27 harvest virtually completed by August, market participants shifted their attention to weather conditions and the development of Brazil's 27/28 crop. Since late August, rainfall has reached all producing regions, while partial September accumulations indicate precipitation above the 10-year average across most producing areas, with the exception of Bahia's Highlands and the Atlântico/South region (see the complete report here). This pattern is likely being influenced by El Niño.

Several Arabica and Conilon producing areas have already recorded the first flowering events of the 27/28 season, although a more widespread bloom is still expected across the country. Forecasts indicate continued rainfall through the remainder of September and into October, supporting soil moisture levels and crop development, although excessive precipitation should be closely monitored. While it remains too early to estimate 27/28 production, the expansion of planted area in recent years, combined with favorable weather conditions, is expected to partially offset the negative effects of the Arabica off-year cycle and support output potential. As a result, weather developments over the coming months will be critical for estimating next season's global supply balance.

Cumulative Precipitation in Brazil’s Coffee Regions (mm)

Source: Somar, Bloomberg, Hedgepoint

On the Robusta side, Vietnam exports remained above average in August, supporting the short-term supply outlook. The country exported 2.1 M bags of coffee in August, the highest volume for the month in seven years, reaching a cumulative volume of 27.7 M bags in the 25/26 season (Oct-Aug), an increase of 19.6% versus 24/25 and one of the highest performances in over 7 seasons.  

Vietnam: Coffee Exports ('000 bags)

Source: Vietnam Customs

As a result, stocks in the country are now extremely low, likely to limit the next month's shipments. Beyond that, the possible impacts of El Niño still loom on the horizon. Cumulative precipitation in the country has been generally below average since the beginning of the 26/27 crop development, with some regions expecting a decrease in this year's production. However, given the increase in area in recent years, we still estimate production similar to 25/26, at 30.5 M bags. Regarding 26/27 harvest, some farmers are expected to initiate fieldwork in early October, but a larger volume of coffee will likely reach the market only after November. 


The El Niño, however, could still affect the 27/28 cycle in Vietnam, especially as the dry season tends to be extended during the phenomenon, decreasing the soil moisture and water availability for irrigation. There is also the risk of the event impacting the Indonesian 27/28 season, which is already under development in the Robusta areas. In this sense, Robusta prices could see some support in the coming months, depending on the impact of El Niño. 

Vietnam: Cumulative Precipitation in Central Highlands (mm)

Source: Google Earth, Copernicus, Hedgepoint

In Summary

Arabica futures have lost momentum in the past few days as improving supply expectations weigh on the market, despite historically low certified stocks continuing to provide some support. A key bearish factor was Brazil’s record August export performance, with total coffee shipments reaching 4.16 M bags, up 31% year-on-year. Strong increases in both Arabica and Conilon exports helped ease concerns about short-term availability, suggesting that Brazilian coffee is finally reaching major consuming markets, including the U.S. and Belgium. The possibility of additional Brazilian coffee entering ICE-certified warehouses could further reinforce the perception of improved near-term supply.

Attention has also shifted toward the development of the 27/28 crop, as widespread rainfall across Brazil and the first flowering events have improved production prospects. Favorable weather and expanded planted area are expected to partially offset Arabica’s off-year cycle, potentially increasing future supply if conditions remain supportive. In the Robusta market, Vietnam continues to export at robust levels, although domestic stocks are becoming increasingly tight. While El Niño poses risks for future crops in Vietnam and Indonesia through drier conditions and reduced irrigation availability, current production expectations remain stable, leaving weather developments as the main factor to watch for price direction in the coming months.

Weekly Report — Coffee

Written by Laleska Moda

laleska.moda@hedgepointglobal.com

Reviewed by Lívea Coda
livea.coda@hedgepointglobal.com
www.hedgepointglobal.com

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