December arabica espresso (KCZ25) on Friday closed up +13.30 (+3.64%), and September ICE robusta espresso (RMU25) closed up +108 (+2.27%).

Espresso costs rallied sharply on Friday, with arabica espresso posting a 3.5-month excessive and robusta posting a 3-month excessive.  Espresso costs continued their 3-week-long rally on Friday on climate considerations in Brazil.  On Monday, Somar Meteorologia reported that Brazil’s largest arabica coffee-growing space, Minas Gerais, acquired no rain through the week ended August 16.  Studies of harm to a few of Brazil’s espresso crop from final week’s frost are additionally boosting costs.

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Espresso costs even have assist on considerations about tighter US espresso provides, as American patrons are voiding new contracts on purchases of Brazilian espresso beans because of the 50% tariffs imposed on Brazilian exports to the US.  That’s tightening the espresso provide within the US market since a couple of third of unroasted espresso comes from Brazil.

Tighter espresso provides from Brazil are additionally 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 baggage, in keeping with exporter group Cecafe.  Cecafe stated July arabica exports fell -21% y/y, whereas robusta exports plunged -49% y/y.  Cecafe stated Brazil’s July espresso exports fell -28% to 2.7 million baggage, and that espresso shipments throughout Jan-July fell -21% to 22.2 million baggage.

A decline in ICE espresso inventories is supporting espresso costs.  ICE-monitored arabica inventories fell to a 1.25-year low of 726,661 baggage final Thursday, earlier than recovering barely to 729,606 baggage on Friday.  Additionally, ICE robusta espresso inventories fell to a 4-week low on Friday of 6,642 tons, reasonably under the 2-year excessive of seven,029 tons posted on July 28.

The continuing Brazilian espresso harvest is bearish for espresso costs.  Safras & Mercado reported Friday that Brazil’s total 2025/26 espresso harvest was 99% full as of August 20, forward of the comparable degree of 98% final yr.  The breakdown confirmed that 100% of the robusta harvest and 98% of the arabica harvest have been full as of August 20.  In associated information, Brazil’s Cooxupe espresso co-op introduced Tuesday that the harvest amongst its members was 86.1% full as of August 15.  Cooxupe is Brazil’s largest espresso cooperative and Brazil’s largest exporter group.

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 baggage.  Nevertheless, cumulative Oct-Jun espresso exports have been down -0.2% y/y at 104.14 million baggage.

Resulting from 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 baggage on March 12, down from a December estimate of 28 million baggage.  In contrast, the Vietnam Nationwide Statistics Workplace reported final Tuesday that Vietnam’s Jan-Jul 2025 espresso exports have 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 enhance by +2.5% y/y to a report 178.68 million baggage, with a -1.7% lower in arabica manufacturing to 97.022 million baggage and a +7.9% enhance in robusta manufacturing to 81.658 million baggage.  FAS forecasted that Brazil’s 2025/26 espresso manufacturing will enhance by +0.5% y/y to 65 million baggage and that Vietnam’s 2025/26 espresso output will rise by 6.9% y/y to a 4-year excessive of 31 million baggage.  FAS forecasts that 2025/26 ending shares will climb by +4.9% to 22.819 million baggage from 21.752 million baggage in 2024/25.  Nevertheless, Volcafe is projecting a worldwide 2025/26 arabica espresso deficit of -8.5 million baggage, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive yr of deficits. 

On the date of publication,

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