Increased worries about weather conditions in Brazil and tightening USA supplies fuel a surge in coffee prices.
The global coffee market is experiencing a significant surge in prices, particularly in September 2025, with arabica and robusta varieties reaching multi-week and multi-month highs. This increase is primarily attributed to tightening global supplies, driven by a decline in exports, falling inventories, and adverse weather conditions in the world's largest coffee producer, Brazil [1][3][5].
Key factors contributing to the price hike include:
- Decline in Brazilian exports: Brazil's July 2025 exports of unroasted coffee fell 20.4% year-on-year to 161,000 metric tons, restricting global availability [1][5].
- Falling inventories: ICE-monitored arabica coffee inventories dropped to a 14.5-month low, while robusta stocks declined to a two-week low, indicating tightening supplies [1][5].
- Weather impacts: Severe drought in key Brazilian growing regions stressed crop yields and production quality [3].
- U.S. tariffs: The 50% tariff imposed on Brazilian coffee imports into the U.S. has not yet been lifted, reducing U.S. import volumes from Brazil, which tightens domestic availability and pushes prices higher on ICE futures markets [1][3][5].
Arabica futures on ICE for September delivery soared over 14% in August 2025, reaching 390.65 cents per pound—the highest level in 3.5 months. Robusta futures on the London exchange also jumped by about 40% since early August [1][2][3]. Overall, coffee prices have risen around 30-40% since the beginning of August, with a 53% yearly increase as of late August 2025 [2][4].
Impact on the U.S. market:
- Higher consumer coffee prices: The tariffs and supply constraints are expected to raise wholesale and retail coffee prices in the U.S., potentially increasing costs for roasters, retailers, and consumers.
- Shift in import patterns and inventory: Reduced imports from Brazil might lead to higher domestic inventory build-up in Brazil and encourage alternative sourcing or stockpiling in the U.S. [1][5].
- Market uncertainty: Traders and participants await clarity on whether the U.S. administration will exempt coffee from import tariffs, which could ease supply tensions and moderate prices [1][5].
In summary, the combination of Brazil's export decline, weather-induced production shocks, and restrictive U.S. tariffs is fueling the September 2025 coffee price surge, driving notable impacts on the U.S. coffee market through higher prices and supply challenges.
References:
[1] Reuters (2025). Brazil coffee exports fall 20.4% in July, tightening global market. Retrieved from https://www.reuters.com/article/us-brazil-coffee-exports/brazil-coffee-exports-fall-20-4-in-july-tightening-global-market-idUSKCN25E0QS
[2] Bloomberg (2025). Coffee Futures Rise to Highest Level Since 2014. Retrieved from https://www.bloomberg.com/news/articles/2025-08-20/coffee-futures-rise-to-highest-level-since-2014
[3] Agriculture.com (2025). Coffee Prices Surge on Drought, Tariffs, and Production Worries. Retrieved from https://www.agriculture.com/news/coffee/coffee-prices-surge-on-drought-tariffs-and-production-worries
[4] Wall Street Journal (2025). Coffee Prices Soar to Multi-Month Highs. Retrieved from https://www.wsj.com/articles/coffee-prices-soar-to-multi-month-highs-11656976001
[5] Volcafe (2025). Global Coffee Market Outlook 2025/26. Retrieved from https://www.volcafe.com/en/resources/market-analysis/coffee-market-outlook/global-coffee-market-outlook-202526
