Volatility in coffee prices is set to continue on the uncertainty over the US tariffs and weather influencing the crop in key producing countries such as Brazil and Vietnam. Coffee prices have been outperforming the broader agricultural complex on supply issues.
“Coffee prices have been outperforming both the broader agricultural complex and the softs category, posting a 29.7 per cent increase in the year-to-date up to the September 15 close,” BMI, a unit of Fitch Solutions said in its outlook.
“Two main factors have been placing upward pressure on prices: US tariffs on Brazilian exports and concerns about supply availability in Brazil. In terms of downside risks, we note that flowering for coffee plants in Brazil usually happens between September and November, with the plants requiring rainfall which comes at the end of the dry season,” BMI said.
Speculation rife
“The market is fluctuating very wildly and a lot of it has to do with speculation. And there are a lot of variables, including on the macro – the uncertainty on the tariffs front. Initially, because of this tariff and the resultant shortage of physical coffee, the market started to go up again in the last few weeks,” said Praveen Kumar Kolimarla of Agrani Coffee and Commodities.
“Also there was some concerns about whether the rainfall in Brazil was adequate for the next crop. So that was driving the market higher. And then suddenly on a rumour that coffee may be exempt from tariffs, there was a wave of technical selling. However, on the fundamental side, I think there is no big concern as at this moment on the rainfall in Brazil. In fact, there were some showers that are expected. So whether it is Brazil or Vietnam or Indonesia or even India for that matter, there are no major issues on the weather front. The other thing that is problematic is the certified stocks, which have been declining week after week. So it was almost a million bags, and now it is 650,000 bags. That is a bit of something that can squeeze the market if it becomes too low,” Kolimarla said.
“Even the rainfall in Brazil, whether it is there or not, is not a huge concern. By November, if it’s still dry, it is a concern. But then typically it happens every year after year. We have seen that the market starts, as soon as the frost season is over, it starts talking about dry weather or lack of rainfall,” Kolimarla said.
Ragaasa impact
Pramod Somiah, a roaster in Kodagu, said the volatility will stay and the price movement will depend on the weather in the key producing countries such as Brazil and Vietnam. Also, the price movement will depend on how the Trump administration responds to the US roasters’ request, who have sought exemption form the import tariff. Further, there are concerns over the impact of rains brought about by the super typhoon Ragaasa on Vietnam’s coffee crop, where harvest is set to begin next month, Somaiah added.
In India, the Coffee Board in its post-blossom estimates or early estimates has pegged the crop at 4.03 lakh tonnes for the year 2025-26 starting October, up 11 per cent over final estimates of 3.63 lakh tonnes. The post blossom estimates comprises of Arabicas of 1.18 lakh tonnes, about 12 per cent higher than previous year’s 1.05 lakh tonnes. Robustas output is seen higher by 9.5 per cent at over 2.84 lakh tonnes (2.57 lakh tonnes as per final estimates of 2024-25).
Published on September 25, 2025