Arabica and Robusta Coffee Navigate Divergent Paths Amid Brazil's Heavy Rains and Vietnam's Surge

The coffee futures market is displaying a tale of two commodities, with arabica and robusta coffee telling starkly different stories. March arabica coffee edged higher by 0.39%, while March ICE robusta coffee declined 2.24% to a 4-week low. This divergence reflects the complex interplay of weather patterns, production forecasts, and global supply dynamics between these two competing coffee varieties.

Brazil’s Rainfall: A Double-Edged Sword for Arabica

Heavy rainfall in Brazil is creating a paradoxical situation for arabica coffee producers and investors. Minas Gerais, Brazil’s largest arabica-growing region, received significantly above-normal precipitation during late January—117% of the historical average—boosting yield prospects. While this is constructive for production volumes, abundant Brazilian arabica supplies are pressuring prices downward.

Brazil’s official crop forecasting agency Conab raised its 2025 production estimate to 56.54 million bags in early December, representing a 2.4% increase from September projections. This abundance of arabica supply is weighing heavily on prices, even as some technical short covering provided modest support to arabica futures earlier in the session.

Vietnam’s Robusta Momentum Challenges the Alternative Commodity

The robusta market faces even steeper headwinds, driven by Vietnam’s commanding position as the world’s largest robusta producer. Vietnam’s 2025 coffee exports surged 17.5% year-over-year to 1.58 million metric tons in early January data, according to the National Statistics Office. Production growth is equally impressive, with 2025/26 output projected to climb 6% year-over-year to 1.76 million metric tons.

The Vietnam Coffee and Cocoa Association (Vicofa) indicated that 2025/26 robusta output could be 10% higher than the previous crop year if weather remains favorable. This supply flood is the primary downside driver for robusta prices, far outweighing any supportive factors.

Global Inventory Rebound: Another Headwind for Both Varieties

Storage dynamics are providing limited relief for either arabica or robusta. ICE-monitored arabica inventories, while having fallen to a 1.75-year low of 398,645 bags in November, have since recovered to 461,829 bags. Similarly, robusta stockpiles dipped to a 1-year low of 4,012 lots in December but rebounded to 4,609 lots recently. These inventory recoveries signal ample availability in the pipeline, reinforcing bearish sentiment for both arabica and robusta.

Supply Dynamics Shift as Exports Stabilize

Brazilian green coffee exports contracted sharply in December, falling 18.4% compared to the prior year to 2.86 million bags. Notably, robusta exports suffered a more severe 61% year-over-year decline, while arabica exports dropped 10%. Despite these export headwinds, the overall global coffee market indicates steadier supply conditions than earlier feared.

The International Coffee Organization reported that global coffee exports for the current marketing year fell just 0.3% year-over-year to 138.658 million bags, suggesting demand is absorbing available supplies. However, the USDA’s Foreign Agriculture Service projects that world coffee production will expand 2.0% year-over-year in 2025/26 to a record 178.848 million bags, with robusta climbing 10.9% against a 4.7% decline in arabica production.

Arabica vs Robusta: The Production Divide Widens

The production forecasts underscore a fundamental divergence between these two coffee varieties. While global arabica production is expected to decline to 95.515 million bags, robusta output will surge to 83.333 million bags. Brazil’s production—dominated by arabica—is projected to decline 3.1% year-over-year to 63 million bags, while Vietnam’s robusta output rises 6.2% year-over-year to a 4-year high of 30.8 million bags.

This structural shift favors neither arabica nor robusta in the near term, as global ending stocks are forecast to fall just 5.4% to 20.148 million bags. With abundant supplies of both coffee varieties expected and inventory recovery underway, the arabica vs robusta dynamic reflects a supply-rich environment that continues to challenge both commodity prices.

The outlook for coffee remains tempered by ample production forecasts and steady supplies flowing to global markets, placing downward pressure on both arabica and robusta pricing throughout 2026.