Robusta Coffee Under Pressure as Brazil Rains Forecast Weighs on Prices

Coffee futures markets faced a sharp retreat on Friday, with robusta leading the decline. March ICE robusta coffee futures fell -66 points (-1.58%) to settle at a 3.5-week low, while March arabica contracts dropped -13.25 points (-3.845%), marking a 5.5-month low for the nearest-futures contract. The selloff intensified concerns about oversupply in a market already grappling with rising inventories and surging production forecasts from major exporters.

Market Pressure Mounts from Multiple Angles

The immediate catalyst for Friday’s retreat centered on weather forecasts for Minas Gerais, Brazil’s principal coffee-growing region. Meteorological data indicated steady rainfall expected over the coming week—a development that undermines concerns about crop stress and suggests adequate moisture for trees heading into harvest season. While adequate rainfall is typically constructive for long-term production, it signaled to the market that supply constraints may be easing.

The Brazil factor presents a complex picture. On the production side, Conab, the government’s crop forecasting agency, raised its 2025 output estimate in early December by 2.4% to 56.54 million bags, up from a September projection of 55.20 million bags. However, recent export data tells a different story. Brazil’s December green coffee shipments declined sharply by -18.4% to 2.86 million bags, according to Cecafe. Arabica exports fell -10% year-over-year to 2.6 million bags, while robusta shipments collapsed by -61% year-over-year to just 222,147 bags—a dramatic contraction suggesting limited current availability despite higher production forecasts.

Vietnam Supply Surge: The Robusta Wild Card

The robusta market faces particular headwinds from Vietnam, the world’s largest robusta producer. Vietnam’s 2025 coffee exports surged +17.5% year-over-year to 1.58 million metric tons according to official statistics released in early January. Production dynamics paint an even more bullish picture for supplies: Vietnam’s output is projected to climb +6.0% year-over-year to 1.76 million metric tons (29.4 million bags), marking a four-year high.

Industry associations have signaled even stronger growth potential. The Vietnam Coffee and Cocoa Association indicated that Vietnamese output could reach 10% above the prior crop year if favorable weather persists through the 2025/26 season. This supply trajectory weighs directly on robusta prices, which are locked in structural competition with ascending Vietnamese shipments.

Global Inventory Trends Signal Shifting Dynamics

ICE warehouse data reveals inventory patterns that complicate the supply outlook. Arabica inventories, which had fallen to a 1.75-year low of 398,645 bags on November 20, recovered to 461,829 bags by mid-January—a 2.5-month high suggesting increased stock availability. Similarly, robusta inventories, which touched a one-year low of 4,012 lots in early December, rebounded to 4,609 lots as of last Friday—a 1.75-month peak.

This inventory recovery introduces a bearish undertone to prices. Higher warehouse stocks typically reflect either reduced demand absorption or expectations of ample supplies ahead, both scenarios that pressure near-term pricing.

Production Forecasts Show Divergent Trends

The USDA’s Foreign Agriculture Service provided a comprehensive outlook in mid-December. Global coffee production in 2025/26 is projected to increase +2.0% year-over-year to a record 178.848 million bags. However, the growth masks significant compositional shifts: arabica production is forecast to decline -4.7% to 95.515 million bags, while robusta production is set to surge +10.9% to 83.333 million bags.

Brazil’s trajectory differs from the global trend. The FAS projects Brazilian production will decline -3.1% year-over-year to 63 million bags in 2025/26, contrasting with the earlier Conab upward revisions. Vietnam, meanwhile, is forecast to produce 30.8 million bags in 2025/26, a +6.2% year-over-year increase and a four-year peak.

Ending global stocks for 2025/26 are expected to fall -5.4% to 20.148 million bags from 21.307 million bags in the current year, suggesting some gradual tightening in the supply balance over the medium term.

The International Perspective

The International Coffee Organization reported that global coffee exports for the current marketing year (October through September) declined marginally by -0.3% year-over-year to 138.658 million bags, indicating that shipment growth remains essentially flat despite production expansions elsewhere. This muted export growth relative to rising production forecasts reinforces the perception of tightening demand relative to supply.

Data compiled and analyzed from multiple sources including official forecasting agencies and commodity exchange reports reveals a market caught between competing narratives: while robusta faces near-term pressure from Vietnamese production strength and global inventory recovery, longer-term arabica dynamics present a more constrained picture with projected output declines and moderating stocks.

The conflicting signals across arabica and robusta markets, combined with weather-dependent Brazilian crop prospects and evolving Vietnamese supply patterns, suggest market participants should monitor price action carefully as the remainder of the season unfolds.