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MILAN – Improved weather conditions in Brazil and the rapid progress of the 2025/26 harvest, which is drawing to a close, caused coffee futures prices to fall in the last session of a week characterised by high volatility. On Friday 25 July, both exchanges returned to negative territory, partly erasing the gains made over the previous three days.
In New York, the main contract for September delivery lost 2.4% closing at 297.55 cents, down 2% from the previous Friday.
The “C” contract had started the week sharply lower, leaving 1,165 points on the field on Monday, July 21.
However, since then, prices have risen again amid forecasts of a cold front with potential frost risk in Brazilian coffee-growing regions. Further supporting prices was the uncertainty surrounding Trump’s impending 50 percent tariffs on all Brazilian imports.
This led to a significant recovery in prices over the next three sessions, up to a weekly high of 304.85 cents at Thursday’s close. The rise continued in the early hours of Friday’s session to an intraday high of 307.45 cents.
Then, weather updates, which downplayed the risk of frost, contributed to the aforementioned change in trend, which brought the benchmark back below the $3 mark.
Safras & Mercado took stock again on 23 July of Brazil’s harvest progress, which was 84% complete by that date — a 7% advance on the previous week. This exceeds last year’s figure (81%) and the five-year average (77%).
Although the Robusta harvest has been slowed by recent rainfall, it is now close to completion, having reached 96% of the estimated production— up from 95% a year ago and the historical average of 93%.
According to S&M analyst Gil Barabach, production is in line with high initial expectations, although there are reports of crop losses locally.
There has also been strong progress for the Arabica crop, which is now 76% completed— a 9% increase on the previous week. This figure is slightly higher than last year’s (75%) and significantly higher than the historical average (69%).
However, this year’s higher humidity has negatively impacted average grain quality in some areas of Minas Gerais.
Similar developments occurred on the London coffee futures market to those on the New York market. September ICE robusta coffee recovered all previous losses on Thursday, to settle at $3,349 — the highest level in eight days — after touching a 16 month-low at the beginning of the week. However, it lost 3.6 percent on Friday, closing the week at $3,228.
According to Rabobank, between January and July, Brazil’s domestic prices for Arabica and Robusta fell by 25% and 47% respectively. For Robusta, this reflects positive harvest expectations in Brazil and Vietnam, where production could grow by 7% according to a new Reuters poll. However, since the tariff announcement, market volatility has increased, likely due to buyers seeking alternative origins, says the report.
“So far, no cancellations of existing contracts have been reported, but new purchases have stalled. Both exporters and importers are awaiting clarity. It is still too early to assess the long-term effects, as it will be crucial to observe whether the tariff is fully implemented and how long it remains in effect. This measure could reshape international coffee trade flows, with implications for producers, exporters, and consumers.”
