Coffee prices remain elevated due to a lack of adequate rainfall in Brazil

Coffee Market Update: Prices Rise Amid Weather Concerns

Arabica coffee futures for March have edged up by 0.17%, while March ICE robusta coffee has also seen a modest increase of 0.48%.

Today, coffee prices are climbing, with arabica reaching its highest level in four weeks. The upward momentum is fueled by insufficient rainfall in Brazil, the leading producer of arabica beans. According to Somar Meteorologia, the Minas Gerais region, Brazil's primary arabica-growing area, received just 47.9 mm of rain in the week ending January 2—only 67% of its usual average. Additionally, a stronger Brazilian real, which hit a one-month peak against the US dollar, is making Brazilian coffee exports less attractive, further supporting arabica prices.

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Robusta coffee prices are seeing only slight gains, as Vietnam—currently the top robusta exporter—has significantly increased its shipments. The National Statistics Office of Vietnam reported a 17.5% year-over-year jump in coffee exports for 2025, reaching 1.58 million metric tons.

Declining inventories at ICE-monitored warehouses are lending support to coffee prices. Arabica stocks tracked by ICE dropped to a 1.75-year low of 398,645 bags on November 20, before rebounding to a 2.5-month high of 461,829 bags. Robusta inventories also hit a one-year low of 4,012 lots on December 10, but later climbed to a five-week high of 4,278 lots by late December.

Previously, US buyers reduced their purchases of Brazilian coffee due to steep tariffs on imports from Brazil. While these tariffs have since been lowered, US coffee inventories remain limited. Between August and October, when the tariffs were in effect, US imports of Brazilian coffee fell by 52% compared to the same period the previous year, totaling 983,970 bags.

Expectations of abundant coffee supplies are putting downward pressure on prices. On December 4, Brazil's crop forecasting agency Conab raised its estimate for the country's 2025 coffee harvest by 2.4%, projecting a total of 56.54 million bags—up from the previous estimate of 55.20 million bags in September.

Rising coffee production in Vietnam is also weighing on prices. Forecasts for the 2025/26 season predict a 6% year-over-year increase to 1.76 million metric tons, or 29.4 million bags—the highest in four years. The Vietnam Coffee and Cocoa Association (Vicofa) indicated that, provided favorable weather continues, the country's 2025/26 coffee output could be 10% higher than the previous crop year. Vietnam remains the world's largest robusta coffee producer.

Global Coffee Supply Trends

Signs of tightening global coffee supplies are providing some price support. The International Coffee Organization (ICO) reported that worldwide coffee exports for the current marketing year (October to September) declined by 0.3% year-over-year, totaling 138.658 million bags.

The USDA's Foreign Agriculture Service (FAS) released its bi-annual report on December 18, projecting global coffee production for 2025/26 to rise by 2% to a record 178.848 million bags. This includes a 4.7% decrease in arabica output to 95.515 million bags, offset by a 10.9% increase in robusta production to 83.333 million bags. The FAS also forecasts a 3.1% drop in Brazil's coffee production to 63 million bags, while Vietnam's output is expected to climb by 6.2% to a four-year high of 30.8 million bags. Ending stocks for 2025/26 are anticipated to fall by 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.