Coffee & Cocoa Weekly Market Update | October 26, 2025

 

Coffee News

Global Coffee Supply Expected to Slightly Exceed Demand; Watch U.S. Tariffs and EU EUDR Policy Developments

Although coffee harvesting has been completed or is nearing completion in Brazil, Colombia, Peru, Indonesia, Uganda, and parts of East and Central Africa, major harvests in Central America, China, Colombia, Ethiopia, India, Mexico, Uganda, and Vietnam are expected to accelerate seasonally toward the end of the year.

The market generally expects global coffee production in the 2025/26 season to reach 174 million bags, while global consumption is also expected to rise to approximately 171 million bags. Therefore, following a 2 million bag supply deficit in 2024/25, the market anticipates a 3 million bag surplus this year.

Despite the potential slight oversupply, market participants remain focused on U.S. tariffs and EU EUDR policies, which could impact coffee trade and consumer markets.

Arabica Coffee Futures Continue to Rise as U.S. Considers Tariffs on Colombian Coffee

The possibility of punitive tariffs on Colombian coffee has triggered another rally in Arabica coffee futures. Colombia is the world’s second-largest exporter of Arabica coffee and the largest exporter of washed Arabica beans.

In 2024, Colombian coffee accounted for 19% of U.S. coffee imports, second only to Brazil at 32%. However, during the first eight months of this year, exports from both countries have changed significantly. U.S. imports from Colombia increased 14.7% year-over-year to 3.3 million bags, primarily due to Colombia’s production growth, while imports from Brazil decreased 20.7% to 3.3 million bags.

Currently, the U.S. tariff on Colombian coffee is 10%, but former President Trump publicly indicated a possible short-term increase, stating on social media that he would soon announce a “significant tariff” on Colombian coffee.

For U.S. roasters who had hoped to offset reduced Brazilian imports with more Colombian coffee, higher tariffs would represent a further setback—driving up Arabica coffee prices in recent days.

Coffee Prices Ease as Weather Risks in Brazil and Vietnam Subside

On Thursday evening (Beijing time), coffee prices experienced a roller-coaster pattern: Arabica futures fell from record highs, and Robusta futures dropped from near 5-week peaks. Analysts attribute the decline to the easing of weather risks in major coffee-producing countries.

The recent price surge was driven by concerns over excessive dryness during Brazil’s critical flowering period, potentially threatening the 2026/27 crop. According to Bloomberg’s weather analysis, Brazil’s coffee-growing regions have faced severe drought, with Minas Gerais receiving only about 70% of its average rainfall over the past month.

However, local Brazilian meteorologists forecasted rainfall in major coffee regions over the upcoming weekend, while Vietnam’s weather bureau lowered the probability of heavy rain in its central coffee-growing region.

Notably, low inventories and La Niña weather patterns continue to support coffee prices.

Favorable Rainfall in Brazil Supports Next Season’s Coffee Flowering

Weather conditions in the first two weeks of October have been favorable in Brazil, helping to increase soil moisture and support flowering for the 2026/27 coffee crop.

Rainfall is expected to continue in key states like Minas Gerais, São Paulo, and Espírito Santo, which will continue to influence the futures market, especially for Arabica coffee. Limited consumption and inventories are accelerating price movements amid a thin and sharply inverted futures market.

A mild cold front moving in from the southeast is helping to keep temperatures around the mid-20s Celsius.

Domestic Coffee Spot Prices in Brazil Rise, Stimulating Sales

Brazil’s coffee spot market performed actively this week, supported by rising international futures prices and a stronger U.S. dollar. An increase in sellers has created a more active trading environment, with high prices encouraging producers to generate cash and manage trade flows for the season.

Volatility in futures markets challenges both traders and farmers. Exporters are leveraging high futures prices to increase payments to producers and reduce premiums, expanding procurement profits and attracting external demand.

Vietnam Coffee Production Could Reach Four-Year High; Brazilian Rainfall Supports Next Season

Bloomberg reports that after a favorable rainy season, Vietnam’s 2025/26 coffee production is expected to reach its highest level in four years, potentially easing supply tensions and putting downward pressure on global prices.

According to a median estimate from seven coffee traders, producers, exporters, and analysts surveyed by Bloomberg, Vietnam’s output in 2025/26 is projected at 1.76 million tons, helping offset global shortages from the previous two seasons.

Typhoon Impact Weakens, but Vietnam Coffee Prices Rise Due to Limited Early-Season Supply

Despite reduced typhoon concerns, domestic coffee prices in Vietnam increased this week due to limited supply at the start of the new season.

In Vietnam’s central highlands, the latest Robusta spot prices range from VND 117,000–118,500 per kg ($4.44–$4.50 USD), up from VND 113,700–114,500 per kg last week.

A typhoon that hit Vietnam on Wednesday, nicknamed “Wind God” for its high winds, did not directly affect coffee regions and has now weakened, causing minimal damage to coffee trees.

Ethiopia Coffee Exports Surge Amid Market Diversification and Global Demand

Between July and September 2025, Ethiopia exported 113,542 tons of coffee, a significant increase from the same period last year. Export revenue rose $243 million (47% YoY).

Rising global demand and improved domestic export infrastructure have driven this growth. While Europe and the Middle East remain primary buyers, emerging Asian markets are also showing strong growth. Germany, Saudi Arabia, and Belgium collectively account for nearly half of exports:

  • Germany: 20,793 tons, $138.18 million

  • Saudi Arabia: 16,088 tons, $102.18 million

  • Belgium: 13,910 tons, $93.45 million

These figures reinforce Ethiopia’s reputation for high-quality beans and reliable supply.

Uganda Coffee Exports Up 2% in August

According to the Uganda Coffee Development Authority (UCDA), Uganda exported 855,441 bags (60 kg each) in August 2025, a 2.45% YoY increase. Robusta exports reached 797,363 bags (+1.8%), and Arabica exports totaled 58,078 bags (+11.9%).

For the first 11 months of the 2024/25 season, Uganda exported 7,392,715 bags, up 27.12% YoY.

Market forecasts for 2024/25 estimate Uganda’s coffee production at 6.5 million bags (5.5 million Robusta, 1 million Arabica), rising to 6.85 million bags in 2025/26 (5.81 million Robusta, 1.04 million Arabica).

Cocoa News

Global Chocolate Demand Plummets

Despite falling cocoa prices, global chocolate demand has collapsed.

Productivity in cocoa and chocolate factories is declining, reflecting the lingering impact of last year’s record-high cocoa prices on profits. In Q3 2025, European cocoa grinding reached a 10-year low, with similar trends in North America and Asia.

Even with cocoa prices dropping nearly 50% from last year, major processors are still handling high-priced stocks purchased earlier. According to Marex, large processors typically lock in cocoa prices six months in advance, meaning current factory costs reflect futures prices from six months ago.

Cocoa Futures Fall to 18-Month Low as Oversupply Pressures Market

On Monday, international cocoa futures fell to an 18-month low, continuing a long-term downward trend. The decline is attributed to weak demand and expectations of a global supply surplus in 2025/26.

Industry analysts highlight persistent demand weakness. Q3 grinding data for Europe, North America, and Asia—released Thursday—is expected to show YoY declines.

ICE data through October 7 shows speculators increased London cocoa net short positions by 5,060 contracts to 10,771 contracts.

Meanwhile, forecasts for Oct 1–12 arrivals from Côte d’Ivoire are down 52% YoY, contradicting expectations of increased output for the new season.

Cocoa market sentiment remains bearish, with technical indicators signaling continued short-term weakness.

German Cocoa Grinding Declines Significantly

According to Germany’s BDSI trade association, Q3 2025 cocoa grinding totaled 94,882 tons, down 5.45% YoY amid ongoing industry pressures.

Rising cocoa and energy costs have caused volatility in Germany’s cocoa industry over the past 18 months, affecting production and operations. All ten German cocoa-processing companies reported reduced output.

European cocoa grinding continues to decline, with Q3 2025 total grinding at 337,353 tons, down 4.8% YoY, per the European Cocoa Organization.

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