Coffee and Robusta Markets Face Renewed Pressure as Brazil Forecasts Rainfall Recovery

Global coffee prices experienced significant declines this week, with arabica marking its lowest point in 5.5 months while robusta hit a 3.5-week trough. According to market data analyzed on commodity platforms like Barchart, March arabica contracts closed down 3.845% while ICE robusta declined 1.58%. The pullback reflects growing concerns about ample global supplies and improving weather conditions for Brazil’s vast coffee-growing regions, particularly Minas Gerais.

Market Pullback: Both Arabica and Robusta Face Downward Pressure

March arabica futures dropped 13.25 points to close at -3.845%, while March ICE robusta fell 66 points, declining 1.58%. The retreat signals a shift in market sentiment as traders reassess supply dynamics. The most immediate catalyst stems from forecasts showing steady rainfall expected across Brazil’s primary coffee-growing zone over the coming week. For a nation responsible for the world’s largest arabica production, such weather developments carry outsized significance.

Brazil’s Rising Coffee Production Pressures Global Prices

In December, Brazil’s crop forecasting agency Conab raised its 2025 coffee production estimate by 2.4%, now projecting 56.54 million bags compared to an earlier estimate of 55.20 million bags. This upward revision signals that Brazilian production will remain robust, adding to the downward pressure on prices. The outlook for increased Brazilian supply, combined with Vietnam’s surging robusta output, creates a challenging environment for coffee producers seeking to defend prices.

Vietnam’s Robusta Surge: A Game-Changer for Global Markets

Vietnam, the world’s dominant robusta coffee producer, is significantly expanding its export footprint. According to its National Statistics Office, Vietnam exported 1.58 million metric tons of coffee in 2025, up 17.5% year-over-year. More concerning for price-supportive dynamics is the production outlook: Vietnam’s 2025/26 coffee output is projected to climb 6% to 1.76 million metric tons (29.4 million bags), marking a 4-year high. The Vietnam Coffee and Cocoa Association projects that output could be 10% higher than the previous crop year if weather conditions remain favorable. This flood of robusta supply from Vietnam continues to weigh on global robusta prices.

Global Coffee Inventory Recovery Weighs on Valuations

Inventory patterns suggest little near-term relief for prices. Arabica inventories monitored by ICE fell to a 1.75-year low of 398,645 bags in November but recovered to 461,829 bags by mid-January. Similarly, robusta inventories slumped to a 1-year low of 4,012 lots in December before bouncing back to 4,609 lots more recently. While the decline to multi-month lows offered temporary support, the subsequent recovery signals that inventory fears have eased, removing a potential bullish factor.

Supportive Factors: Insufficient to Counter Supply Pressures

Several developments have limited downside momentum, though they remain insufficient to reverse the bearish trend. Brazil’s December green coffee exports declined 18.4% to 2.86 million bags, with arabica shipments down 10% and robusta exports falling 61% year-over-year. Additionally, Brazil’s largest arabica growing region, Minas Gerais, received only 33.9 mm of rainfall during the week ended mid-January, equivalent to just 53% of the historical average. The International Coffee Organization also reported that global coffee exports for the current marketing year fell 0.3% year-over-year to 138.658 million bags.

Long-Term Production Forecasts Shape Market Outlook

The USDA’s Foreign Agriculture Service offered a more expansive 2025/26 outlook, projecting world coffee production will increase 2.0% year-over-year to a record 178.848 million bags. However, the composition matters: arabica production is expected to decline 4.7% to 95.515 million bags, while robusta will surge 10.9% to 83.333 million bags. For Brazil specifically, FAS forecasts a 3.1% production decline to 63 million bags, while Vietnam’s output is projected to rise 6.2% to 30.8 million bags. These competing dynamics explain current price volatility, as declining arabica supplies conflict with surging global robusta availability.

Looking ahead, FAS projects that ending stocks for 2025/26 will fall 5.4% to 20.148 million bags from 21.307 million bags in 2024/25. Though inventory drawdowns typically support prices, the magnitude of global supply growth—particularly from robusta—appears sufficient to cap price advances. The fundamental tension between tightening arabica supplies and expanding robusta volumes continues to shape coffee market dynamics, with robusta weakness persisting as a structural headwind on overall commodity valuations.