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MILAN — The rally in coffee futures markets continues: in yesterday’s trading day, Monday, August 11, the Ice Arabica September contract gained 3.7% closing at 320.70 cents, the highest since the third decade of June. In London, the most trade contract for November delivery increased by 4.4%, rising to $3,664. A factor supporting prices is the low level of Ice Arabica’s certified stocks, which amounted yesterday to just 737,609 bags – the lowest level in more than 14 and a half months.
The latest Commitment of Traders report from the ICE Arabica has seen the Managed Money Fund increased their net long position by 0.21% over the week of trade to Tuesday 5th August 2025, to register a new long position at 21,459 lots.
The longer term in nature, Index Fund sector of this market marginally decreased their net long position by 4.52%, to register a new net-long position of 31,569 lots on the day.
The latest Commitment of Traders report from the ICE Robusta coffee market has seen the Speculative Managed Money Sector marginally decrease their net short position by 3.12%, over the week of trade to Tuesday 5th August 2025, to a new net short position of 5,671 lots.
In Brazil, low temperatures with very small damage were reported in a single municipality in Cerrado. Updates from Arabica producing areas continue to indicate an increasingly disappointing crop in terms of productivity.
According to the latest report from market analyst Archer Consulting many producers are still confirming/assuming a shortfall in the 2025/26 harvest – forecasting an Arabica crop of between 20-25 million bags (total estimated shortfall of over 30%) – while others (the majority) continue to estimate a crop of between 33-36 million bags (total estimated shortfall of between 12%-15%).
If the Brazilian crop does fall then we could see the market return to 350-400 cents per pound again soon, says the analyst. The “world stocks x world consumption” ratio would then return to critical levels – similar to what happened in 2024.
According Sucafina, the main driver behind the rally in the last week has been increasing pressure on coffee spreads, as a result of the newly imposed tariff of 50% on all Brazilian imports coming into the United States.
“The Brazilian farmer, who holds the vast majority of their 2025/26 crop (now completing harvest), is extremely well capitalized and is in no hurry to sell, “ says Sucafina.
“However, many US based roasters had not truly believed that the tariffs were going to stay and are now forced to either accept a 50% increase in Brazilian coffee prices or be forced to slowly switch their coffee blends out of their biggest origin.
In terms of desperation, the market seems to be slanted, once again, for the roaster to be forced to absorb as much pain as possible and come to the level where the Brazilian producer is willing to sell.
This is well understood by speculative funds, who are now seeking to increase investment in luxury commodities that have inelastic demand with regards to price.
Furthermore, the full fledged implementation of EUDR on Dec 31st forces once again a possibility of roasters in Europe over-accumulating spot inventory into year end to avoid hiccups with EUDR contracts,” concludes the Swiss trader.
