December arabica espresso (KCZ25) on Tuesday closed down -5.45 (-1.44%), and November ICE robusta espresso (RMU25) closed up +40 (+0.86%).

Espresso costs on Tuesday settled blended.  Harvest pressures in Brazil weighed on arabica costs after Brazil’s Cooxupe espresso co-op introduced Tuesday that the harvest amongst its members was 91.3% full as of August 22.  Cooxupe is Brazil’s largest espresso cooperative and Brazil’s largest exporter group.  Individually, Safras & Mercado reported final Friday that Brazil’s general 2025/26 espresso harvest was 99% full as of August 20, forward of the comparable stage of 98% final yr.  The breakdown confirmed that 100% of the robusta harvest and 98% of the arabica harvest had been full as of August 20.

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Espresso costs noticed help Tuesday from tighter inventories.  ICE robusta espresso inventories fell to a 1-month low of 6,614 tons on Tuesday.  Additionally, ICE-monitored arabica inventories fell to a 1.25-year low of 717,113 luggage on Tuesday.

Espresso costs have rallied sharply over the previous 4 weeks, reaching a 3.5-month excessive on Monday, attributable to considerations about climate circumstances in Brazil.  Somar Meteorologia reported Monday that Brazil’s largest arabica coffee-growing space, Minas Gerais, obtained no rain throughout the week ended August 23.  Stories of harm to a few of Brazil’s espresso crop from final week’s frost are additionally boosting costs.

Espresso costs even have help attributable to considerations about tighter US espresso provides, as American patrons are voiding new contracts for purchases of Brazilian espresso beans due to the 50% tariffs imposed on Brazilian exports to the US.  That is tightening the espresso provide within the US market, as a few third of unroasted espresso comes from Brazil.

Lowered exports from Brazil are supporting costs.  On August 6, Brazil’s Commerce Ministry reported that Brazil’s July unroasted espresso exports fell -20.4% y/y to 161,000 MT.  In associated bullish information launched final Wednesday, Brazil’s inexperienced espresso exports in July fell -28% y/y to 2.4 million luggage, in accordance with exporter group Cecafe.  Cecafe reported that July arabica exports fell -21% y/y, whereas robusta exports plunged -49% y/y.  Cecafe mentioned Brazil’s July espresso exports fell -28% to 2.7 million luggage, and that espresso shipments throughout Jan-July fell -21% to 22.2 million luggage.

As a bearish issue, the Worldwide Espresso Group (ICO) reported August 6 that world June espresso exports rose +7.3% y/y to 11.69 million luggage.  Nevertheless, cumulative Oct-Jun espresso exports had been down -0.2% y/y at 104.14 million luggage.

On account of drought, Vietnam’s espresso manufacturing within the 2023/24 crop yr decreased by -20% y/y to 1.472 MMT, the smallest crop in 4 years.  Additionally, Vietnam’s Common Statistics Workplace reported that 2024 Vietnam espresso exports fell by -17.1% y/y to 1.35 MMT.   Moreover, the Vietnam Espresso and Cocoa Affiliation lowered its 2024/25 Vietnam espresso manufacturing estimate to 26.5 million luggage on March 12, down from a December estimate of 28 million luggage.  In contrast, the Vietnam Nationwide Statistics Workplace reported final Tuesday that Vietnam’s Jan-Jul 2025 espresso exports had been up +6.9% y/y to 1.05 MMT.

The USDA’s Overseas Agriculture Service (FAS) projected on June 25 that world espresso manufacturing in 2025/26 will improve 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% improve in robusta manufacturing to 81.658 million luggage.  FAS forecasted that Brazil’s 2025/26 espresso manufacturing will improve 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.  Nevertheless, Volcafe is projecting a world 2025/26 arabica espresso deficit of -8.5 million luggage, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive yr of deficits. 

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