Today's Coffee Rate Under Pressure from Rising Global Supplies and Favorable Weather Conditions

The global coffee market is experiencing mixed signals, with arabica futures showing modest gains while robusta contracts are retreating to their lowest levels in four weeks. This divergence reflects deeper tensions in the market: favorable growing conditions in major producing regions are boosting supply expectations, which is dampening prices despite some technical recovery attempts in arabica trading.

Mixed Market Signals in Today’s Coffee Trading Session

March arabica futures edged higher today, while March robusta contracts declined, creating a split between the two key coffee benchmarks. The arabica recovery appears driven by mild technical short covering rather than fundamental support, as prices struggled to break through last week’s multi-month lows. The contrast between arabica’s strength and robusta’s weakness underscores the divergent supply dynamics emerging across different coffee types and regions.

Brazil’s Heavy Rainfall: Double Impact on Coffee Rate Dynamics

Brazil, the world’s largest arabica producer, received significantly above-average rainfall in late January. Somar Meteorologia reported that Minas Gerais, Brazil’s premier arabica-growing region, received 69.8 mm of rain—representing 117% of historical averages. While abundant moisture benefits crop development and yield potential, it simultaneously weighs on market valuations.

The Brazilian government’s crop forecasting agency, Conab, raised its 2025 production estimate to 56.54 million bags in early December, up 2.4% from previous projections. Higher expected harvests signal ample supply availability, creating structural headwinds for coffee rates. However, recent Brazilian export data tells a different story: green coffee shipments in December fell sharply, with arabica exports declining 10% year-over-year and robusta shipments plummeting 61% year-over-year to just 222,147 bags.

Vietnam’s Robusta Surge Pressures Prices Globally

Vietnam’s dominance in robusta production continues to amplify downward pressure on coffee rates. The country’s coffee exports in early 2025 jumped 17.5% year-over-year to 1.58 million metric tons, according to Vietnam’s National Statistics Office. Production is projected to climb 6% year-over-year to 1.76 million metric tons, or approximately 29.4 million bags—reaching a four-year high.

The Vietnam Coffee and Cocoa Association forecasted that 2025/26 output could be 10% higher than the previous crop year if weather conditions remain favorable. This combination of rising production and aggressive export momentum from the world’s largest robusta supplier creates substantial supply pressure on global coffee rates.

Inventory Dynamics and Market Implications

Interestingly, while prices face headwinds from production growth, inventory trends present mixed signals. ICE-monitored arabica inventories recovered to a 2.5-month high of 461,829 bags by mid-January, though they remain below their peak levels. Similarly, robusta stocks rebounded to a 1.75-month high of 4,609 lots, reversing earlier lows. The inventory recovery, combined with production forecasts, suggests ample coffee availability will persist, continuing to pressure current coffee rates.

Global Production Forecasts Shape Market Outlook

The USDA’s Foreign Agriculture Service projected in mid-December that world coffee production for 2025/26 will reach a record 178.848 million bags, reflecting a 2% year-over-year increase. While arabica production is expected to decline 4.7% to 95.515 million bags, robusta output will surge 10.9% to 83.333 million bags—driven largely by Vietnam’s expansion.

Global ending stocks for 2025/26 are forecast to fall 5.4% to 20.148 million bags from current levels, but the composition shift toward robusta and away from arabica will likely keep overall coffee rates under pressure. Brazil’s production is projected to decline 3.1% year-over-year, while Vietnam’s output will rise 6.2% to a four-year high of 30.8 million bags, signaling a structural realignment in global coffee supply dynamics.

The market faces competing forces: weather-induced production potential in Brazil creates near-term supply concern, while Vietnam’s robust expansion points toward sustained pressure on coffee rates over the medium term. Traders monitoring the coffee rate today should watch for further rainfall reports from major growing regions and any shifts in global export patterns as the year progresses.