Coffee down 2% pressured by higher expected supply from Vietnam 📉

Coffee futures (COFFEE) are down more than 2% today, driven by increasing concerns over a potential supply surplus. According to the latest data from Marex, global coffee stocks in the 2025/26 season could exceed demand by 1.2 million bags.

• Marex estimates that global coffee production for the current season will reach 170.7 million bags, with global consumption at 170.5 million bags. In the 2025/26 season, production is expected to rise to 172 million bags, primarily due to an anticipated recovery in Vietnam, where output is projected to reach 29.8 million bags, an increase of 2.2 million compared to 2024/25 - even despite the weather issues.
• Meanwhile, Brazil’s production is expected to decline by 1.5 million bags, dropping to 64 million, while global consumption is set to rise only slightly to 170.8 million bags, resulting in a modest supply surplus. As a result, coffee futures are declining in both New York and London. ICE data shows that Arabica and Robusta inventories have reached their highest levels in a week and a month, respectively, adding further pressure on the market.
• Marex highlights a potential decline in global coffee demand due to rising prices. Consumption in Brazil is expected to weaken, while the increase in demand in the U.S. and Europe remains relatively small. Brazil, one of the world's largest coffee markets, is experiencing a significant price surge, with JDE Peet’s raising coffee prices by up to 30%. As a result, JDE Peet’s (JDEP.NL) shares are down more than 3% today.

Potential U.S. Import Tariffs Add Market Uncertainty

An additional risk factor for the coffee market is the potential imposition of import tariffs in the U.S.. The National Coffee Association (NCA) is analyzing the possible effects of trade measures proposed by the Trump administration, which could impact trade with Canada and Mexico.

• It is worth noting that Starbucks roasts coffee for hundreds of Canadian stores in U.S.-based facilities, highlighting the deep integration of North American coffee supply chains. Mexico remains a key coffee supplier to the U.S., exporting an average of over one million bags annually.
• NCA President Bill Murray has called for coffee to be excluded from potential tariff measures, emphasizing that such levies could affect three out of four American consumers.
• Market uncertainty is rising, especially as additional trade restrictions could extend to other South American countries, which are among the leading coffee suppliers to the U.S. So far, Trump has only briefly mentioned Brazil in the context of tariffs, but this issue may re-emerge in future trade negotiations.

COFFEE (D1)

The Arabica coffee futures contract has broken below its uptrend line, signaling potential downward pressure toward a test of the EMA50 (orange line) in the near term.

Source: xStation5