India’s Coffee Prices Rise on Supply Concerns, Vietnam Grapples with Export Hurdles
India’s Coffee Prices Rise on Supply Concerns, Vietnam Grapples with Export Hurdles

India’s Coffee Prices Rise on Supply Concerns, Vietnam Grapples with Export Hurdles

  • 15-May-2025 8:00 PM
  • Journalist: John Keats

The International Coffee market dominated contradictory market trends in April 2025. Prices went up in India, and Brazil but came down in the Vietnamese market. The reason for this volatility in prices is a range of factors such as fluctuations in currencies, varying demand patterns and supply side problems due to chronic weather woes.

In Brazil, Arabica coffee prices experienced a significant rise in April 2025, following the trend continued in the last month. The appreciation of the Brazilian Real against the US Dollar on month – on – month basis was the major reason for this price rise. Adding to this, below average precipitation over the major coffee producing areas of Brazil, has emerged to be a probable threat to the coffee crop. Data compiled from all participants in the market indicate that this year's next harvest period, which should start in April 2025, is predicted to produce less coffee this time than last due mainly to relentless dry weather affecting main growing areas.

On the demand front, international demand constrained resulting in a decrease in the volume of exports. Through April 2025, Brazil has exported approximately 3.09 million bags of million bags, or 27.7%, fewer than the export volume of the same period last month.

Likewise, in the Indian market the prices of Arabica coffee have seen a modest price slope.  The price increase is primarily propelled by the   supply-side restrictions in the wake of lower production during the ongoing coffee crop cycle and scant carry-forward inventories from the earlier season. Based on figures published by the USDA, India's coffee production in the 2025–26 crop is pegged at 6.05 million 60-kg bags (about 3.63 lakh tonnes), a reduction due to weather-related yield issues. Arabica specifically is likely to come under further pressure, with the area under cultivation showing a 0.5% decline, and yields expected to fall by 3% to 384 kg/hectare. This decline is also in line with the 'off-year' portion of Arabica's biennial crop cycle, adding to the muted supply outlook.

On the demand side, coffee buying activity during April 2025 is likely to continue somewhat mixed. Local demand has continued to be modest; nevertheless, the arrival of the Indian summer season is likely to improve consumption of caffeine-based drinks, maybe contributing to short-term demand growth. Conversely, export action has been weak. India's coffee exports are expected to fall by more than 10% in 2025, primarily because of lower production levels and tight carry-over stocks from the last harvest.

Conversely, coffee prices in Vietnam saw a significant decrease in April 2025, following the declining trend from the month before. This decline in price is largely due to lower volumes of exports to overseas markets, indicating diminished foreign demand and logistical issues. Moreover, the Vietnamese coffee industry is also grappling with several headwinds, such as squeezes in domestic inventories and increased tariffs for importation in the United States, which have risen cost burdens on the exporters. These issues have added to the worries among market players with many expecting sustained softness in coffee prices in the near term.

As per ChemAnalyst, the prices are expected to stay volatile, owing to persistent production constraints. To add to this, any global development including import tariffs, trade uncertainties and currency fluctuations may also remain the key factors in shaping the global coffee market dynamics.

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