Strong buying pressure in the energy market pushed the MXV-Index up nearly 0.5% to 2,835 points at the close of yesterday's trading session (July 23). The energy sector was a hot spot, with 4 out of 5 commodities closing in positive territory, and the prices of two crude oil commodities soaring 6-7% in a single session.
MXV-Index
In contrast to the volatility of the oil market, coffee prices continued to fall in yesterday's trading session. At closing, both Arabica and Robusta coffee prices decreased by 2.3%, to $6,821/ton and $3,708/ton respectively, marking the third consecutive day of decline.
Coffee futures price movements for September
Selling pressure intensified after the U.S. Department of Agriculture (USDA) released its first comprehensive forecast report for the 2026-2027 crop year, projecting a more abundant global supply outlook. Specifically, world coffee production in the 2026-2027 crop year (July 2026 to July 2027) is projected to increase by more than 6% compared to the previous year, reaching 189.67 million bags. This figure aligns with market expectations of a record crop in Brazil . Alongside this, global coffee inventories are projected to increase by 7.8% to 26.3 million bags, further putting pressure on prices.
Weather conditions in Brazil are also becoming more favorable for harvesting. According to Cooxupé, the world's largest coffee cooperative, as of July 18th, harvesting progress in its operating areas had reached 47.3%, a 16.4% increase compared to the previous week. However, this figure is still about 21% lower than the same period last year due to heavy and prolonged rains in June and early July that disrupted operations in the fields.
Coffee prices fell sharply despite Arabica inventories dropping to their lowest level in over two years.
However, while the outlook for new crop supply is putting pressure on prices, the amount of coffee available on the futures market continues to decline, somewhat limiting the market's downward momentum.
Certified Arabica coffee stocks at the ICE exchange fell by more than 4,700 bags yesterday, to 315,615 bags, the lowest level in 2.25 years and down more than 59% compared to the same period last year. Notably, the amount of coffee originating from Brazil was only over 9,550 bags, accounting for less than 3.3% of total stocks and only about 1/20 of the amount at the same time last year. Meanwhile, the amount of coffee awaiting grading remains empty, indicating that no new stock is yet to be added to ICE inventories.
Thus, the coffee market is being affected by two opposing forces. The prospect of increased global production and inventories in the new crop year is putting pressure on prices, but the continuously declining supply of certified Arabica on ICE remains a supporting factor for the market.
Regarding the weather, Climatempo forecasts a cold front will move into São Paulo between Thursday and Friday, bringing moderate rain and potentially temporarily disrupting harvesting activities in some areas.
In South Minas and Zona da Mata, scattered, insignificant rainfall is forecast. Meanwhile, the state of Espírito Santo may experience heavier rainfall over the weekend, causing localized difficulties for harvesting and drying. However, despite the drop in temperature, there is currently no risk of frost damaging plantations, and dry weather is expected to return soon, prevailing in most growing regions next week.
Domestically, the coffee trading situation remains quite sluggish as the supply of coffee at the end of the harvest is very scarce, but buying demand is also low. Yesterday, the price of bulk green coffee beans in the Central Highlands was purchased at 96,400-97,000 VND/kg, a slight decrease compared to about 97,200-98,000 VND/kg last week.
Domestic coffee price trends
The USDA forecasts that Vietnam's 2026/27 crop production could reach 32.5 million bags (equivalent). This increase is a result of farmers expanding their planted area after a long period of high coffee prices, creating an incentive to reinvest in production.
In Vietnam, the world's largest exporter of Robusta coffee, actual supply shortages are becoming severe and are expected to persist until the new harvest begins in October. Concerns about unfavorable weather in the key Central Highlands region are also strongly supporting bullish sentiment on the London exchange.
Based on supply data and weather patterns, the coffee market is forecast to remain at high levels from now until September, with the possibility of slight localized price increases. For the Vietnamese domestic market, despite short-term downward adjustments, prices are expected to mainly fluctuate between 93,000 and 98,000 VND/kg due to persistently low supply.