Coffee Prices Decline Amidst Abundant Rainfall
Today’s March Arabica Coffee (KCH26) is down 7.20 (-2.00%), while January ICE Robusta Coffee (RMF26) has decreased by 86 (-2.13%).
For the first time in two weeks, coffee prices have widened their decline, with Arabica hitting a three-week low and Robusta reaching a four-month low. Recent heavy rain in Brazil has alleviated concerns regarding coffee crop development and falling prices, as Climatempo reported that “heavy and persistent rain” is anticipated in Brazil’s coffee-growing areas this week.
The bearish trend in coffee prices is largely attributed to above-average rainfall in Brazil. According to Somar Meteorologia, Minas Gerais, which is Brazil’s largest Arabica coffee-growing region, received 79.8 mm of rain during the week leading up to December 12, amounting to 155% of its historical average.
The outlook for plentiful coffee supplies continues to pressure prices. Brazil’s harvest forecasting agency, Conab, updated its estimate for total coffee production in 2025 to 56.54 million bags, representing a 2.4% increase from its September estimate of 55.2 million bags.
Robusta coffee is experiencing pressure due to concerns about its ample supply. Vietnam’s National Bureau of Statistics announced that the country’s coffee exports spiked to 88,000 tons in November, up 39% from last year, bringing the total for January through November to 1.39 million tons—a 14.8% year-on-year increase.
On a more positive note for Arabica, last Wednesday, the exporter group Cecafe declared that Brazil’s green coffee exports in November fell to 3.3 million bags, a 27% decrease from the previous year.
Shifts in iced coffee inventories are also affecting prices. Arabica stocks tracked by ICE dipped to a 1.75-year low of 398,645 bags on November 20, but have since rebounded to a five-week high of 426,523 bags as of December 5. Meanwhile, ICE’s Robusta coffee inventory fell to 4,012 lots last Wednesday, marking an 11.5-year low.
Several factors have influenced U.S. purchasing behavior, such as previously elevated tariffs on Brazilian imports, which discouraged U.S. buyers. These tariffs have been relaxed, yet U.S. coffee stocks remain tight. Between August and October, when President Trump’s tariffs were active, U.S. purchases of Brazilian coffee plummeted by 52% compared to the same period last year.
The increase in Vietnamese coffee supply is putting further downward pressure on prices. Projections for Vietnam’s coffee production in 2025/26 indicate a 6% year-on-year rise to 1.76 MMT, or 29.4 million bags—the highest in four years. Additionally, the Vietnam Coffee and Cocoa Association (Vicofa) suggested that good weather could boost production by as much as 10% compared to the previous year. Notably, Vietnam is the largest producer of Robusta coffee globally.
Conversely, signs of tight global coffee supplies are bolstering prices. The International Coffee Organization (ICO) reported a slight decrease of 0.3% in global coffee exports for the current marketing year (October-September), totaling 138,658,000 bags.
In June, the USDA Foreign Agriculture Service (FAS) projected that global coffee production for 2025/26 would hit a record 178.68 million bags, which is a 2.5% year-on-year increase. They foresee Arabica production declining by 1.7% to 97.022 million bags, while Robusta production should increase by 7.9%, reaching 81.658 million bags. Moreover, they anticipate that Brazil’s coffee production will be 65 million bags in 2025/26, a 0.5% rise, and Vietnam’s will reach 31 million bags, a 6.9% year-on-year growth—the highest level in four years. The FAS also expects ending stocks for 2025/26 to grow by 4.9% to 22,819,000 bags compared to 21,752,000 bags in 2024/25.
