Brazil Rain Predictions Cause Significant Drop in Coffee Prices

Coffee Market Update: Prices Drop Sharply

March contracts for arabica coffee (KCH26) have fallen by 3.65% (-12.60), while March ICE robusta coffee (RMH26) is down 1.77% (-74) today.

Both arabica and robusta coffee prices are experiencing significant declines, with arabica reaching its lowest level in over five months and robusta hitting a three-and-a-half-week low. This downward trend is largely attributed to forecasts predicting consistent rainfall in Minas Gerais, Brazil's primary coffee-producing region, over the coming week.

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Factors Influencing Coffee Prices

Expectations for abundant coffee supplies are weighing on the market. On December 4, Brazil's crop forecasting agency, Conab, increased its projection for the country's 2025 coffee harvest by 2.4% to 56.54 million bags, up from the previous estimate of 55.20 million bags in September.

Robusta prices are also under pressure due to a surge in exports from Vietnam, the top global producer of robusta beans. According to Vietnam's National Statistics Office, the country exported 1.58 million metric tons of coffee in 2025, a 17.5% year-over-year increase as of January 5.

Vietnam's coffee production is expected to rise further, with forecasts indicating a 6% year-over-year increase for the 2025/26 season, reaching 1.76 million metric tons (29.4 million bags)—the highest in four years. The Vietnam Coffee and Cocoa Association (Vicofa) stated on October 24 that, provided favorable weather continues, the 2025/26 crop could be 10% larger than the previous year. Vietnam remains the leading robusta coffee producer worldwide.

Rising inventories are also contributing to weaker prices. ICE-monitored arabica stocks, which had dropped to a 1.75-year low of 398,645 bags on November 20, rebounded to a 2.5-month high of 461,829 bags by January 14. Similarly, ICE robusta inventories, after hitting a one-year low of 4,012 lots on December 10, climbed to a 1.75-month high of 4,609 lots last Friday.

Supportive Factors for Coffee Prices

On the other hand, a reduction in Brazilian coffee exports is providing some support for prices. Cecafe reported that Brazil's green coffee exports in December dropped by 18.4% to 2.86 million bags. Arabica exports fell by 10% year-over-year to 2.6 million bags, while robusta exports plummeted by 61% to 222,147 bags.

Lower-than-average rainfall in Brazil, the world's largest arabica producer, is also helping to stabilize prices. Somar Meteorologia noted that Minas Gerais, Brazil's key arabica region, received just 33.9 mm of rain in the week ending January 16—only 53% of the historical average.

Global Coffee Supply and Demand

Signs of tightening global coffee supplies are lending support to the market. The International Coffee Organization (ICO) reported on November 7 that worldwide coffee exports for the current marketing year (October to September) declined by 0.3% year-over-year to 138.658 million bags.

According to the USDA’s Foreign Agriculture Service (FAS) bi-annual report released on December 18, global coffee production for 2025/26 is projected to reach a record 178.848 million bags, up 2.0% year-over-year. The report anticipates a 4.7% decrease in arabica output to 95.515 million bags, while robusta production is expected to rise by 10.9% to 83.333 million bags. FAS forecasts Brazil’s 2025/26 coffee crop will fall by 3.1% to 63 million bags, whereas Vietnam’s output is set to increase by 6.2% to a four-year high of 30.8 million bags. Ending stocks for 2025/26 are predicted to decrease by 5.4% to 20.148 million bags, down from 21.307 million bags in 2024/25.