Coffee Prices Climb for Second Day Amid Brazil Frost Fears

July 24, 2025 – Market Update

Global coffee prices continued to rise for a second consecutive session on both the London and New York exchanges, driven by ongoing concerns over potential frost in Brazil’s coffee-growing regions. However, the rally is showing signs of slowing as global supply remains robust.

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London Robusta Hits $3,300 per Ton

On the London ICE exchange, Robusta coffee futures for September 2025 closed at $3,300 per ton, up $11 or 0.33% from the previous session. This marks a second-day increase and pushes Robusta prices to a key psychological level.

However, the November 2025 contract slightly declined by $3, settling at $3,259 per ton, reflecting some caution in the near-term supply outlook.

📈 Robusta Futures Snapshot – July 24, 2025

• Sep 2025: $3,300/t (+$11)
• Nov 2025: $3,259/t (−$3)

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New York Arabica Posts Strong Gains

Meanwhile, Arabica prices on the New York ICE exchange continued to rally. The September 2025 contract rose by 5 cents, or 1.69%, to close at 301.35 US cents/pound. The December 2025 contract also climbed by 5.10 cents, finishing at 293.80 US cents/pound.

📈 Arabica Futures Snapshot – July 24, 2025

• Sep 2025: 301.35 US¢/lb (+5.00)
• Dec 2025: 293.80 US¢/lb (+5.10)

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Frost Warnings in Brazil Support Prices

According to meteorologists at Climatempo, a cold front is expected to move across Brazil’s coffee regions later this week, potentially triggering frost that could damage crops during a critical harvesting window. These forecasts have injected upward momentum into both Robusta and Arabica markets.

However, traders remain cautious. Despite the frost threat, abundant global supply is acting as a cap on price surges.

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Robusta Faces Pressure from Rising Inventories

ICE-monitored Robusta stockpiles rose to 6,410 lots as of July 23—the highest level in nearly 12 months. This uptick in certified inventory is applying pressure on Robusta prices, despite the recent short-term gains.

In contrast, Arabica inventories tracked by ICE fell to a three-month low of 806,062 bags, providing additional support to New York prices.

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Vietnam Crop Outlook Adds Bearish Pressure

Market sentiment is also influenced by supply updates from major producers. A recent crop survey in Vietnam, the world’s largest Robusta producer, forecasts a 7% increase in output for the 2025–2026 season. This anticipated growth adds medium-term bearish pressure to Robusta pricing.

Meanwhile, harvests in Brazil and Indonesia are progressing smoothly, with no major weather disruptions currently affecting logistics or volume, according to Reuters.

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U.S. Tariff Watch: Potential Market Shift Looms

Traders are closely monitoring the U.S. government’s proposed 50% import tariff on Brazilian coffee, set to take effect on August 1. If implemented, it could shift export flows, with more Brazilian Robusta likely diverted to European markets, reshaping global supply chains.

While Brazil’s Robusta shipments to Europe are currently limited, a tariff-induced redirection could accelerate these flows in the coming months.

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Structural Shift Signs in Robusta Futures

According to I & M Smith, the London Robusta market is showing early signs of structural change. The narrowing price spread between near-term and long-term contracts suggests shifting sentiment among market participants. However, this contraction in backwardation is still in its early stages and may not yet represent a lasting change in market structure.

Traders and supply chain managers are watching closely to determine whether these shifts will stabilize the futures curve—a key tool for hedging, financing, and managing coffee inventories.

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Arabica-Robusta Price Spread Remains Wide

While London futures are hinting at potential normalization, New York Arabica contracts continue to show wider spreads, reflecting deeper segmentation between the two markets.

Analysts note that this sustained price inversion disrupts traditional market structure, potentially complicating risk management and supply chain operations across roasters, exporters, and processors.

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Outlook: Weather, Stocks, and Trade Policy in Focus

With weather volatility in Brazil, rising Robusta inventories, a strong Vietnamese crop forecast, and pending U.S. trade actions—all in play—coffee markets remain complex and sensitive.

Short-term price action is likely to remain reactive to weather updates and inventory shifts, while structural trends will depend on how supply and demand recalibrate in response to these unfolding developments.

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