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RNZ News
15 hours ago
- Business
- RNZ News
Are coffee prices heading down? Don't hold your breath
Photo: Public domain Global coffee prices might have fallen but there's a warning that it might not mean you pay any less in your local cafe. RaboResearch data shows arabica coffee prices dropped 17 percent in the last three months and robusta, often used to make instant coffee, dropped 30 percent. It said this was due to improved production forecasts and diminishing demand. Global coffee demand is expected to drop 0.5 percent in 2025. A surplus of 1.4 million bags is projected for the 2025/26 year, primarily in arabicas. RaboResearch then also forecasts a much bigger surplus the following year, particularly if Brazilian weather is normal. Photo: Unsplash Infometrics chief executive Brad Olsen said the price declines were encouraging but did not necessarily mean New Zealanders would see coffee prices fall. "Given the full increase in global coffee prices hasn't fully hit Kiwis' morning caffeine hit yet there might not be real relief for New Zealand coffee prices." He said while World Bank data showed arabica coffee prices were down 3.1 percent in May from the peak in February they were still 2.3 times the May 2019 price. Robusta was down 9.8 percent from the peak but the same margin up on 2019. "Stats NZ data shows that instant coffee prices in May 2025 were 14 percent higher than a year ago, and only 36 percent higher than in 2019 - so less than a tenth of global coffee price pressure has hit directly. With not as much of the original hit from coffee prices hitting local prices, we might not see a lot of relief. If anything, forward ordering of coffee means we might still see further price increases trickle through as beans are imported after being ordered before recent price falls. "Café operators have clearly been trying to absorb as much of coffee price rises as they can to limit how many people might stop buying at higher prices. Stats NZ data also shows takeaway coffee prices are up just 3.8 percent per year in May, despite the large increases in both coffee and dairy prices, suggesting cafes are taking the hit on their margins rather than pass price increases on as much." Café and roastery owner Richard Corney, of Flight Coffee and The Hangar, has been warning that retail coffee prices are unsustainably low. He said if prices had kept up with the increase in café costs in recent years, a flat white would be selling for $7 .
Globe and Mail
10-06-2025
- Business
- Globe and Mail
Coffee Prices Rebound on Strength in the Brazilian Real
July arabica coffee (KCN25) today is up +3.20 (+0.89%), and July ICE robusta coffee (RMN25) is up +70 (+1.58%). Coffee prices today shook off early losses and moved higher on strength in the Brazilian real. The real (^USDBRL) climbed to an 8-month high against the dollar today, discouraging export selling from Brazil's coffee producers. Coffee prices today initially moved lower after above-normal rainfall in Brazil eased dryness concerns. Somar Meteorologia reported today that Brazil's biggest arabica coffee growing area of Minas Gerais, received 23.4 mm of rain the week ended June 7, 207% of the historical average for this time of year. Coffee harvest pressures in Brazil are limiting the upside in coffee prices after Safras & Mercado reported that Brazil's 2025/26 coffee harvest was 28% complete as of June 4, just above the five-year average of 27% for the same time of year. Coffee prices have been under pressure over the five weeks, with arabica coffee falling to a 2-month low last Tuesday and robusta dropping to a 7-1/4 month low due to concerns about higher coffee production and ample supplies. On May 19, the USDA's Foreign Agricultural Service (FAS) forecast that Brazil's 2025/26 coffee production will increase by 0.5% year-over-year (y/y) to 65 million bags and that Vietnam's 2025/26 coffee output will rise by 6.9% y/y to 31 million bags. Brazil is the world's largest producer of arabica coffee, and Vietnam is the world's largest producer of robusta coffee. An increase in ICE coffee inventories is undercutting coffee prices. ICE-monitored robusta coffee inventories rose to an 8-3/4 month of 5,438 lots on May 30. Also, ICE-monitored arabica coffee inventories rose to a 4-1/4 month high of 892,468 bags on May 27. On May 9, the USDA forecasted that 2025/26 coffee production in Honduras, Central America's largest coffee producer, would climb +5.1% y/y to 5.8 million bags. Also, consulting firm Safras & Mercado raised its Brazil 2025/26 coffee production estimate to 65.51 million bags from an earlier estimate of 62.45 million bags. In addition, Conab, Brazil's crop forecasting agency, raised its Brazil 2025 coffee production estimate to 55.7 million bags from a January estimate of 51.81 million bags. Demand concerns are bearish for coffee prices. Several global commodity importers, including Starbucks, Hershey, and Mondelez International, recently said the US's baseline 10% tariff on imports would raise prices and further pressure sales volumes. Smaller coffee exports from Brazil are bullish for prices. On May 12, Cecafe reported that Brazil's April green coffee exports fell -28% y/y to 3.05 million bags, and Jan-Apr coffee exports fell -15.5% y/y to 13.186 million bags. Robusta coffee has support from reduced robusta production. Due to drought, Vietnam's coffee production in the 2023/24 crop year dropped by -20% to 1.472 MMT, the smallest crop in four years. Also, Vietnam's General Statistics Office reported that 2024 Vietnam coffee exports fell -17.1% y/y to 1.35 MMT. Last Tuesday, Vietnam's National Statistics Office reported that Vietnam's 2025 Vietnam's Jan-May coffee exports are down -1.8% y/y to 813,000 MT. In addition, the Vietnam Coffee and Cocoa Association on March 12 cut its 2024/25 Vietnam coffee production estimate to 26.5 million bags from a December estimate of 28 million bags. Conversely, the USDA's FAS on May 19 projected that Vietnam's 2025/26 coffee crop would climb +7% y/y to a 4-year high of 30 million bags. The USDA's biannual report on December 18 was mixed for coffee prices. The USDA's Foreign Agriculture Service (FAS) projected that world coffee production in 2024/25 will increase +4.0% y/y to 174.855 million bags, with a +1.5% increase in arabica production to 97.845 million bags and a +7.5% increase in robusta production to 77.01 million bags. The USDA's FAS forecasts that 2024/25 ending stocks will fall by -6.6% to a 25-year low of 20.867 million bags from 22.347 million bags in 2023/24. Separately, the USDA's FAS on November 22 projected Brazil's 2024/25 coffee production at 66.4 MMT, below its previous forecast of 69.9 MMT. The USDA's FAS projects Brazil's coffee inventories at 1.2 million bags at the end of the 2024/25 season in June, down -26% y/y. For the 2025/26 marketing year, Volcafe on December 17 cut its 2025/26 Brazil arabica coffee production estimate to 34.4 million bags, down by about 11 million bags from a September estimate after a crop tour revealed the severity of an extended drought in Brazil. Volcafe projects a global 2025/26 arabica coffee deficit of -8.5 million bags, wider than the -5.5 million bag deficit for 2024/25 and the fifth consecutive year of deficits.
