Robusta Coffee Futures Rally on Weak Dollar, Mixed Supply Signals

March arabica coffee and March ICE robusta coffee futures both posted gains in early trading as currency market dynamics shifted in commodities’ favor. The sustained decline in the dollar index, which fell another 0.5% to touch a fresh 4-month low, provided crucial support for the global commodity complex, including coffee markets. As the greenback weakens, dollar-denominated commodities like robusta coffee become more attractive to international buyers, creating upward momentum in futures contracts.

Dollar Weakness Fuels Coffee Market Recovery

The relationship between currency movements and commodity pricing remains a dominant market driver. When the dollar softens, it reduces the cost barrier for overseas investors purchasing U.S.-listed commodities. This dynamic has proven instrumental in lifting both arabica and robusta coffee futures off their recent lows. The greenback’s deterioration to 4-month lows signals potential continued support for commodity prices moving forward, making robusta coffee futures attractive for traders positioning ahead of the spring trading season.

Brazilian Production Outlook Clouds Robusta Coffee Rally

Brazil, controlling roughly one-third of global arabica supply, continues sending mixed signals to the market. Export data from early January revealed a concerning contraction: total green coffee exports fell 18.4% compared to year-ago levels, declining to 2.86 million bags. More notably for robusta coffee, Brazil’s robusta shipments plummeted 61% year-over-year to just 222,147 bags, indicating severe production pressure in this category. However, weather complications have emerged. The Minas Gerais region, Brazil’s premier arabica-growing zone, received only 33.9mm of rainfall during mid-January, representing just 53% of the historical norm. Such below-average precipitation typically constrains crop development and supports prices, yet Brazil’s official crop agency raised its 2025 production estimate in early December, projecting 56.54 million bags—a 2.4% increase from September forecasts. This conflicting narrative between weather stress and rising production estimates creates uncertainty for robusta coffee futures positioning.

Vietnam Floods Robusta Coffee Market with New Supply

Vietnam’s role as the world’s leading robusta producer increasingly dominates pricing dynamics. January export figures showed Vietnam shipped 1.58 MMT of coffee in 2025, representing a 17.5% surge compared to the prior year. Looking ahead, Vietnam’s 2025/26 crop is projected to climb 6% year-over-year to 1.76 MMT, or 29.4 million bags—marking a 4-year production high. Industry associations including the Vietnam Coffee and Cocoa Association (Vicofa) indicated that output could surge an additional 10% above the previous crop year if weather conditions remain benign. The prospect of such ample robusta coffee supplies from the world’s largest producer pressures prices despite dollar-friendly conditions. This production abundance complicates the bullish case for robusta coffee futures.

Inventory Rebalancing Could Challenge Near-Term Prices

Exchange warehouses have shown a notable recovery pattern after touching multi-year lows. ICE-monitored arabica inventories bottomed at 398,645 bags in November before rebounding to 461,829 bags by mid-January, reaching a 2.5-month peak. Similarly, ICE robusta inventories touched a 1-year low of 4,012 lots in December, then recovered to 4,609 lots by late January. While inventory rebuilding indicates market rebalancing, it simultaneously reduces the supply squeeze that typically supports prices. This inventory recovery dynamic could limit upside potential for both arabica and robusta coffee futures contracts in the near term.

Global Production Set to Hit Record, Pressuring Prices

The longer-term outlook presents additional headwinds. The USDA’s Foreign Agriculture Service (FAS) projected in mid-December that world coffee production in 2025/26 will reach a record 178.848 million bags, up 2.0% year-over-year. While arabica production faces a 4.7% contraction to 95.515 million bags, robusta coffee production is forecast to surge 10.9% to 83.333 million bags. Brazil specifically faces a projected 3.1% production decline to 63 million bags, while Vietnam’s output is expected to climb 6.2% to 30.8 million bags. The International Coffee Organization (ICO) reported in November that current marketing year exports fell only 0.3% year-over-year to 138.658 million bags, suggesting markets remain adequately supplied. Ending stocks for 2025/26 are projected to fall 5.4% to 20.148 million bags from the prior year’s 21.307 million bags, a modest tightening that may provide limited support. These competing forces—weaker dollar supporting robusta coffee futures against abundant global supplies and rising producer inventories—will likely determine directional moves ahead.