Coffee Market Update
On Thursday, December Arabica Coffee closed down by 1.95, which is a decrease of 0.48%. Meanwhile, January ICE Robusta Coffee also saw a decline, dropping 23 points or 0.53%.
For the second consecutive day, coffee prices declined, and robusta reached a two-week low, largely due to the potential for U.S. tariff reductions. Treasury Secretary George Bessent mentioned on Wednesday that significant announcements about crops, including coffee, that aren’t produced domestically would be forthcoming.
StoneX recently released its initial forecast for the 2026/27 season, projecting that Brazil would produce around 70.7 million bags of coffee, comprising 47.2 million bags of Arabica beans. This figure reflects a notable year-on-year increase of 29%, which has further exerted downward pressure on coffee prices.
Concerns about drought conditions in Brazil have eased following recent rainfall in the country. According to Somar Meteorologia, the Minas Gerais region, the largest Arabica coffee-growing area, received 72.1 mm of rain in the week leading up to November 7, exceeding the historical average by 160%.
Meanwhile, supply increases from Vietnam are also contributing to bearish price trends. Vietnam’s National Bureau of Statistics reported that coffee exports from January to October 2025 rose by 13.4% compared to the previous year, reaching 1.31 million metric tons. The forecast for Vietnam’s coffee production for 2025/26 anticipates a growth of 6% year-on-year, totaling 1.76 million metric tons or roughly 29.4 million bags, which would be the highest level in four years. Additionally, the Vietnam Coffee and Cocoa Association announced on October 24 that favorable weather might lead to a 10% increase in production for the same period.
On the other hand, decreasing ICE coffee stocks lend some support to coffee prices. The U.S. has imposed a 50% tariff on imports from Brazil, leading to a notable reduction in ICE coffee inventories. As of Thursday, the Arabica stocks monitored by ICE dropped to 403,430 lots, marking a 1.75-year low, whereas ICE’s Robusta coffee stock fell to 5,760 lots, its lowest in 3.75 months. About a third of the unroasted coffee in the U.S. comes from Brazil, and this tariff has created tighter supplies, prompting U.S. buyers to cancel new contracts for Brazilian coffee.
Global coffee supply concerns are supporting prices. The International Coffee Organization reported a 0.3% year-on-year decline in global coffee exports for the current marketing year, totaling 138,658,000 bags.
Prices received a boost after the National Oceanic and Atmospheric Administration (NOAA) indicated a 71% likelihood of a La Niña event in the Southern Hemisphere during October to December, which could bring excessively dry weather to Brazil, potentially harming the 2026/27 coffee harvest.
Additionally, Brazil’s harvest forecasting agency, Conab, revised its projection for the 2025 Arabica coffee yield downward to 35.2 million bags— a drop of 4.9% from its earlier estimate of 37 million bags. The total forecast for Brazil’s coffee output in 2025 has also been lowered to 55.2 million bags, down by 0.9% from the May estimate of 55.7 million bags.
On June 25, the USDA Foreign Agriculture Service forecasted that global coffee production for 2025/26 is expected to reach a record 178.68 million bags—a 2.5% increase from the prior year. The report indicated Arabica production would decrease by 1.7% to 97.022 million bags, while Robusta production would rise by 7.9% to 81.658 million bags. Brazil’s coffee production for that year is projected to rise by 0.5% to 65 million bags, while Vietnam is expected to see a 6.9% increase to reach 31 million bags, the highest output in four years. Ending stocks for 2025/26 are estimated to grow by 4.9% to 22,819,000 bags, compared to 21,752,000 bags in 2024/25.
