Besides favorable weather conditions and export activity in Brazil , the Intercontinental Exchange (ICE) raising margin requirements for coffee futures four times since the beginning of July has added further pressure to the market. Increased costs to maintain trading positions have led many commodity funds to reduce or close positions, while reduced liquidity has resulted in greater volatility in coffee prices.
In the agricultural commodities group, corn prices also moved away from their short-term peaks as weather conditions in the US improved. Simultaneously, slowing exports and demand for corn in ethanol production continued to put downward pressure on prices.
According to the Vietnam Commodity Exchange (MXV), coffee prices uniformly declined in yesterday's trading session. Notably, Arabica prices fell 4.3% to $6,891.6 per ton, marking the fifth consecutive day of weakness. Robusta prices for September delivery also decreased by 2.9%, to around $3,790 per ton.
One factor putting pressure on coffee prices is the Intercontinental Exchange (ICE) raising margin requirements for coffee futures trading four times since the beginning of July. The increased cost of maintaining positions has forced many commodity funds to reduce or close their existing positions. Market liquidity has therefore decreased, making coffee prices more susceptible to sharp increases or decreases in short periods.
In addition, the USD/BRL exchange rate rose slightly for two consecutive sessions to 5.1, reflecting the weakening of the real and providing further impetus for Brazilian producers to boost sales to international markets.
Furthermore, the prospect of supply from Brazil is also putting additional pressure on coffee prices. Dry weather in major producing regions is helping the country accelerate the harvest. World Weather Inc. forecasts little to no rain in Brazil's coffee-growing regions over the next 10 days, thus facilitating continued harvesting and bringing new supplies to the market sooner.
Regarding exports, the Brazilian Coffee Exporters Association (Cecafé) reported that green coffee exports last month reached 2.64 million bags, a 14.78% increase compared to the same period last year. Of this, Arabica exports exceeded 2 million bags, a 9.9% increase, while Robusta Conilon exports reached 633,478 bags, a 33% increase.
However, looking at the entire crop year, Brazil's coffee exports are still significantly lower than the same period last year. For the cumulative crop year 2025-2026, which runs from July 2025 to June 2026, the country exported approximately 34.5 million bags of green coffee, a decrease of 16.6% compared to the previous crop year.
Meanwhile, the decline in Arabica prices was somewhat limited as inventories at the ICE exchange remained low. According to statistics, certified Arabica inventories have decreased continuously over the past three months and now stand at only 334,250 bags, the lowest level in over two years. This represents a decrease of 62,700 bags, or 15.8%, compared to a month ago and a decrease of nearly 500,000 bags, or 59%, compared to the same period last year.
According to Mr. Quach Van Luan, Director of the Hanoi branch of Saigon Futures Joint Stock Company and Trading Member 002 of MXV, in the short term, coffee prices are under pressure from the ICE exchange raising margin requirements, the strengthening US dollar, and favorable harvesting conditions in Brazil. However, the significant decrease in Arabica inventories at the ICE exchange is still a factor that somewhat limits the downward trend in prices.
Regarding tariff policy, the Brazilian coffee market received positive news as most of the country's coffee products, including instant coffee, have been excluded from the proposed 25% tariff by the US administration on imports from Brazil under investigation under Section 301.
In addition, William “Bill” Murray, President of the National Coffee Association (NCA), has submitted a petition to the U.S. government requesting that unflavored instant coffee be added to the list of products exempt from tariffs.
Domestically, the average price of bulk green coffee beans in the Central Highlands is currently trading at 96,200 VND/kg, down 2,200 VND/kg from the 5-month peak recorded the previous day. Trading activity remains relatively quiet as many factories are limiting purchases after domestic coffee prices rose to their highest level in over 5 months.
In line with the industrial raw materials market, selling pressure also prevailed in the agricultural commodities market. Notably, corn prices reversed course after reaching their highest level in about a month and a half. At the close of trading, corn prices fell 1.2% to $182.6 per ton. Improved weather conditions in the US, along with weak weekly export figures, are the main factors putting downward pressure on prices.