Brazilian Rains, Vietnamese Surplus Drive Coffee Futures to Multi-Month Lows
NEW YORK/LONDON — Coffee futures slumped on Friday, with arabica hitting a 5.5-month low and robusta falling to a 3.5-week low, as weather forecasts and supply data shifted market sentiment. The March arabica contract (KCH26) closed down 3.85%, while March robusta (RMH26) fell 1.58%.
The immediate pressure stemmed from forecasts of steady, crop-nourishing rains over the next week in Brazil's key arabica-growing state of Minas Gerais. "The market is reacting to the prospect of near-perfect weather easing concerns about Brazilian output," said market analyst Elena Rodriguez of AgriVision Consultants. "After last year's anxieties, any sign of normalcy is a bearish trigger."
Longer-term supply fundamentals also weighed on prices. Brazil's crop agency, Conab, recently raised its 2025 production estimate to 56.54 million bags. More significantly, Vietnam, the world's top robusta producer, reported a 17.5% year-on-year jump in January exports. The country's 2025/26 production is projected to reach a four-year high of 29.4 million bags.
"The data from Vietnam is a game-changer," noted David Chen, a Singapore-based commodities trader. "We're looking at a substantial robusta surplus hitting the market, which will cap prices for the foreseeable future, even if Brazilian arabica faces hiccups."
These bearish factors overshadowed some supportive signals. Brazilian green coffee exports fell sharply in December, and rainfall in Minas Gerais remains below the historical average. Furthermore, ICE-monitored warehouse inventories for both arabica and robusta, while recovering from recent lows, remain historically tight.
The USDA's latest bi-annual report encapsulates the divergent global trend: it forecasts a record total world coffee crop for 2025/26, driven by a robusta surge, even as arabica production is expected to decline.
Market Voices:
"This is a classic correction, not a collapse. The structural deficit in high-quality arabica hasn't vanished. We're just seeing the market price in better near-term weather. I'm viewing this dip as a buying opportunity for longer-term portfolios." — Michael Thorne, Portfolio Manager, GreenBean Capital.
"It's sheer madness. For months we heard about 'tight supplies' and 'climate risk,' and now one rain forecast and suddenly we're drowning in coffee? The algorithms are running the show, flipping sentiment on a dime while real growers get squeezed. The volatility is unsustainable." — Sarah Jenkins, Founder, FairGrind Advocacy Network.
"The data clearly shows a two-speed market. Robusta is swimming in Vietnamese supply, but the arabica story, especially for high-grade beans, is more nuanced. The price relationship between the two will be fascinating to watch this year." — Arun Mehta, Senior Analyst, Global Commodities Research.
On the date of publication, the author did not have positions in any securities mentioned. This information is for educational purposes only.