Coffee prices drop sharply as expectations rise for a record-breaking coffee harvest in Brazil

Coffee Market Update: Prices Drop Sharply

March contracts for arabica coffee (KCH26) have fallen by 5.23% (-15.70), while March ICE robusta coffee (RMH26) is down 5.14% (-198) today.

Both arabica and robusta coffee prices have hit significant lows—arabica at its lowest point in over seven months and robusta at a six-month low. This downward trend has persisted for the past three weeks, largely due to expectations of a record coffee harvest in Brazil. On February 5, Brazil's crop forecasting agency, Conab, projected that the country's 2026 coffee output will surge by 17.2% year-over-year to reach a record 66.2 million bags. Arabica production is expected to jump by 23.2% to 44.1 million bags, while robusta is set to rise by 6.3% to 22.1 million bags.

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Factors Impacting Coffee Prices

Recent rainfall in Brazil has further improved the outlook for the country's coffee harvest. According to Somar Meteorologia, the Minas Gerais region—Brazil’s top arabica-producing area—received 72.6 mm of rain in the week ending February 6, which is 113% above the historical average.

Vietnam, the world’s leading robusta exporter, has seen a surge in coffee shipments, which is putting additional downward pressure on robusta prices. The National Statistics Office of Vietnam reported a 38.3% year-over-year increase in January coffee exports, reaching 198,000 metric tons. For 2025, Vietnam's coffee exports climbed 17.5% to 1.58 million metric tons.

Robusta prices are also being weighed down by expectations of higher Vietnamese production. The country’s 2025/26 coffee output is forecast to rise by 6% to 1.76 million metric tons (29.4 million bags), marking a four-year high.

Rising inventories are another bearish factor. ICE-monitored arabica stocks, which had dropped to a 1.75-year low of 396,513 bags on November 18, rebounded to 461,829 bags by January 7. Similarly, ICE robusta inventories recovered from a 13-month low of 4,012 lots on December 10 to 4,662 lots by January 26.

Supportive Developments for Coffee Prices

On a positive note, Brazil’s Trade Ministry reported a 42.4% year-over-year decline in January coffee exports, totaling 141,000 metric tons.

Colombia, the world’s second-largest arabica producer, has also seen a reduction in supply. The National Federation of Coffee Growers announced that January production dropped 34% year-over-year to 893,000 bags, which could help support prices.

Additional Insights

Signs of tightening global coffee supplies are providing some support for prices. The International Coffee Organization (ICO) reported on November 7 that global coffee exports for the current marketing year (October to September) fell by 0.3% to 138.658 million bags.

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