Robusta Coffee Prices Slide Amid Brazil's Rainy Outlook and Surging Global Supplies

Barchart’s commodity analysis shows that coffee futures took a significant hit this week, with arabica and robusta varieties facing mounting pressure from multiple headwinds. March arabica coffee fell 3.845% to close down 13.25 points on Friday, marking a 5.5-month low, while March robusta coffee declined 1.58% (down 66 points) to reach a 3.5-week low. The retreat underscores growing concerns about oversupply in global coffee markets, despite some offsetting factors that could support prices longer-term.

The primary catalyst for this week’s selling came from weather forecasts predicting steady rainfall across Minas Gerais, Brazil’s dominant coffee-growing region, over the coming week. Such precipitation helps replenish soil moisture and supports crop development—typically bullish for production but bearish for prices when combined with already-ample supply expectations.

Brazil’s Record Production Weighs on Robusta and Arabica Markets

Brazil’s swelling coffee output is the main drag on prices. In early December, Conab, Brazil’s official crop forecasting agency, raised its 2025 production estimate by 2.4% to 56.54 million bags, up from 55.20 million bags forecast in September. This upward revision signals record harvests on the horizon, flooding the market with coffee supplies and pushing buyers to wait for better pricing.

The production surge extends beyond arabica. Brazil also produces robusta coffee, though in smaller volumes than arabica. With the world’s largest coffee producer ramping up output across both varieties, global inventories face further pressure from excess supply.

Vietnam’s Robusta Boom Intensifies Market Headwinds

Vietnam’s robust coffee harvest is compounding the downward pressure, particularly on robusta futures. Vietnam’s National Statistics Office reported in early January that 2025 coffee exports surged 17.5% year-over-year to 1.58 million metric tons (MMT). Projections for Vietnam’s 2025/26 coffee production climb an additional 6% year-over-year to 1.76 MMT, or 29.4 million bags—a 4-year high.

The Vietnam Coffee and Cocoa Association further noted that if weather remains favorable, the country’s 2025/26 output could reach 10% higher than the previous crop. Vietnam holds the distinction of being the world’s largest robusta producer, so any surge in its harvests reverberates through global robusta pricing.

Inventory Recovery Adds to Supply Concerns

Despite some positive price supports, ICE inventory levels are recovering from recent lows, weighing on sentiment. Arabica inventories fell to a 1.75-year low of 398,645 bags in November but rebounded to 461,829 bags by mid-January—a 2.5-month high. Similarly, robusta inventories hit a 1-year low of 4,012 lots in December before climbing back to 4,609 lots in recent sessions.

This inventory buildup suggests the market is moving away from acute supply tightness, eroding one of the key fundamental supports for higher coffee prices.

Brazil’s Export Slowdown Provides Limited Support

One bright spot for prices lies in Brazil’s shrinking export activity. Brazil’s coffee exports in December fell 18.4% to 2.86 million bags, with arabica exports down 10% year-over-year to 2.6 million bags and robusta shipments plummeting 61% year-over-year to just 222,147 bags. This pullback in export volume from the world’s largest arabica producer does provide some price support by tightening near-term global supplies.

However, this slowdown appears seasonal and temporary rather than a structural shift that could meaningfully support multi-week price rallies.

Global Market Outlook: Mixed Signals on Production and Demand

Looking ahead, the USDA Foreign Agriculture Service (FAS) projects world coffee production in 2025/26 will climb 2.0% year-over-year to a record 178.848 million bags. Within that total, arabica production is forecast to decline 4.7% to 95.515 million bags, while robusta production will surge 10.9% to 83.333 million bags. This shift toward robusta amplifies the structural pressure on robusta futures.

The International Coffee Organization (ICO) reported in November that global coffee exports for the current marketing year fell just 0.3% year-over-year to 138.658 million bags—a relatively tight outcome that offers modest support to prices. However, FAS forecasts that 2025/26 ending stocks will fall only 5.4% to 20.148 million bags from 21.307 million bags in 2024/25, suggesting ample inventory coverage will persist.

Brazil’s own production is projected to ease 3.1% year-over-year to 63 million bags in 2025/26, providing minimal relief given Vietnam’s rapid growth. Vietnam’s output is expected to climb 6.2% year-over-year to a 4-year high of 30.8 million bags, cementing its role as the offsetting force in global supply dynamics.

The Bottom Line

Coffee prices face a challenging near-term environment with robust global supplies, rising robusta output, and abundant inventories all conspiring to cap upside. While Brazil’s reduced exports and tight ICO trade data offer some anchors, the prevailing currents remain decidedly bearish for both arabica and robusta futures.