Coffee Markets Surge Amid Supply Worries from Vietnam and Brazil

Coffee prices have moved higher over the past two weeks after Brazil’s Trade Ministry reported on August 6 that Brazil’s July unroasted coffee exports fell -20.4% y/y to 161,000 MT. In related bullish news released last Wednesday, Brazil’s green coffee exports in July fell -28% y/y to 2.4 million bags, according to exporter group Cecafe. Cecafe said July arabica exports fell -21% y/y, while robusta exports plunged -49% y/y. Cecafe said Brazil’s July coffee exports fell -28% to 2.7 million bags, and that coffee shipments during Jan-July fell -21% to 22.2 million bags.

A decline in ICE coffee inventories is supporting coffee prices. ICE-monitored arabica inventories fell to a 1.25-year low of 726,661 bags last Thursday, before recovering slightly to 736,099 bags on Wednesday. Also, ICE robusta coffee inventories fell to a 3-week low on Wednesday of 6,732 lots, moderately below the 2-year high of 7,029 lots posted on July 28.