International Coffee Prices Surge as Dollar Weakens, Brazil Supply Concerns Support Market

March arabica coffee and March ICE robusta coffee both posted solid gains on Friday, with robusta hitting a 1.5-month high. The international coffee price movement reflects a combination of currency fluctuations and fundamental supply concerns reshaping the market landscape.

Dollar Weakness Triggers Coffee Rally

The dollar index’s slip to a 3.5-month low on Friday prompted significant short covering across most commodities, with coffee benefiting notably from this currency shift. March arabica coffee rose +0.92% while robusta surged +2.88%, indicating strong international coffee prices momentum fueled by dollar weakness. When the dollar weakens, commodities priced in dollars become more attractive to international buyers, creating a supportive environment for coffee prices globally.

Brazil Export Decline and Weather Pressure Coffee Supply

Brazil, the world’s largest arabica producer, is becoming a critical supply constraint. Recent data from Cecafe showed that Brazil’s total green coffee exports fell -18.4% to 2.86 million bags, with arabica shipments down -10% year-over-year to 2.6 million bags. More concerning for robusta supplies, exports plummeted -61% year-over-year to just 222,147 bags. Beyond export challenges, Brazil’s primary coffee-growing region of Minas Gerais received only 33.9 mm of rainfall recently—just 53% of the historical average according to Somar Meteorologia. This below-average rainfall in a major arabica production area provides fundamental support for international coffee prices.

Vietnam Production Surge Weighs on Robusta Market

Competing with Brazil’s supply challenges, Vietnam—the world’s largest robusta producer—is ramping up output substantially. Vietnam’s 2025 coffee exports jumped +17.5% year-over-year to 1.58 million metric tons according to the National Statistics Office. More significantly, Vietnam’s 2025/26 coffee production is projected to climb +6% year-over-year to 1.76 million metric tons, or 29.4 million bags, marking a 4-year high. The Vietnam Coffee and Cocoa Association noted that output could be 10% higher than the previous year if weather remains favorable. This surge in Vietnamese robusta supplies presents headwinds for robusta coffee prices.

Inventory Recovery and Supply Dynamics Reshape Coffee Prices

Interestingly, recent inventory movements present mixed signals for international coffee prices. ICE-monitored arabica inventories, which hit a 1.75-year low of 398,645 bags in November, have since recovered to a 2.5-month high of 461,829 bags. Similarly, robusta inventories bounced from a 1-year low of 4,012 lots to a 1.75-month high of 4,609 lots. While this recovery suggests tightening pressure is easing, global export data tells a different story—the International Coffee Organization reported that worldwide coffee exports for the current marketing year fell -0.3% year-over-year to 138.658 million bags.

Global Production Outlook Mixed for Coffee Prices

The USDA’s Foreign Agriculture Service projected that 2025/26 world coffee production will increase +2.0% year-over-year to a record 178.848 million bags. However, this growth masks a critical split: arabica production is forecast to decline -4.7% to 95.515 million bags, while robusta production is set to surge +10.9% to 83.333 million bags. Brazil’s 2025/26 production is expected to fall -3.1% to 63 million bags, while Vietnam’s output will rise 6.2% to a 4-year high of 30.8 million bags. Looking ahead, ending stocks for 2025/26 are projected to fall -5.4% to 20.148 million bags from 21.307 million bags in the prior year.

The current international coffee price environment reflects a delicate balance between supportive factors—dollar weakness, Brazilian weather concerns, and declining arabica supplies—and bearish elements including Vietnam’s strong production growth and global inventory recovery. Traders monitoring coffee prices should watch for shifts in weather patterns across Brazil and any acceleration in Vietnamese export volumes as the season progresses.