Global Weather Divergence Pressures Arabica Coffee Prices While Supporting Robusta

Arabica coffee prices faced headwinds on Thursday as March futures closed down 1.57%, while their robusta counterparts climbed higher with a 0.82% gain. This divergence reflects contrasting weather patterns emerging across the world’s two primary coffee-producing regions. The arabica coffee market is navigating a complex landscape shaped by multiple competing factors—from rainfall patterns to production forecasts—that will likely influence trading decisions in the coming weeks.

Weather Patterns Drive Arabica Coffee Weakness While Robusta Gains

The split performance between arabica and robusta coffee reflects divergent meteorological outlooks across key growing regions. Brazil’s primary coffee belt, Minas Gerais, faces steady rainfall forecasts over the coming week, weighing on arabica coffee valuations. The additional moisture reduces concerns about drought stress, but abundant water supplies can pressure prices by supporting robust crop development. Conversely, Vietnam’s Central Highlands—home to the world’s robusta production—expects limited precipitation over the next 10 days, which supported robusta coffee’s price advance as water scarcity concerns gained traction among traders.

ICE Inventory Recovery Creates Headwinds for Arabica Coffee Markets

The rebound in monitored coffee inventories presents a bearish backdrop for both arabica coffee and robusta varieties. Arabica inventories, which had declined to a 1.75-year low of 398,645 bags in mid-November, recovered to 461,829 bags by mid-January—a 2.5-month high. Similarly, robusta coffee stockpiles rebounded from a December low of 4,012 lots to 4,609 lots last week. Rising inventory levels typically signal weakening supply constraints, reducing the urgency for buyers to secure supplies. For arabica coffee specifically, this inventory normalization undermines the price support that would otherwise come from genuine stock scarcity.

Production Growth Complicates the Arabica Coffee Outlook

Brazil’s crop forecasting agency Conab has raised its production expectations, projecting 56.54 million bags for the 2025 harvest—a 2.4% increase from prior estimates. This upward revision adds to supply pressures affecting arabica coffee prices. Looking ahead to 2025/26, the USDA’s Foreign Agriculture Service forecasts arabica coffee production will decline 4.7% year-over-year to 95.515 million bags, though total global coffee output is expected to reach a record 178.848 million bags due to surging robusta production in Vietnam and elsewhere.

Export Trends Show Mixed Signals for Arabica Coffee

Brazil’s coffee export numbers present a complex picture for arabica coffee traders. December exports fell 18.4% to 2.86 million bags overall, with arabica coffee shipments declining 10% year-over-year to 2.6 million bags. This export slowdown could normally support prices, but it’s offset by the rising production forecasts and improving supply dynamics. The USDA predicts Brazil’s 2025/26 coffee output will decline 3.1% year-over-year to 63 million bags, suggesting tightening conditions ahead despite current export weakness.

Vietnam’s robusta coffee sector presents a starkly different picture, with 2025 exports surging 17.5% year-over-year to 1.58 million metric tons. Vietnamese coffee production is projected to climb 6% year-over-year to a four-year high of 1.76 million metric tons (29.4 million bags), with the Vietnam Coffee and Cocoa Association suggesting output could rise 10% higher if favorable weather persists through the season.

Global Supply Dynamics Set the Broader Framework

The International Coffee Organization reported that global coffee exports for the current marketing year fell marginally by 0.3% year-over-year to 138.658 million bags, indicating relatively stable international trade despite regional variations. The USDA projects that 2025/26 ending stocks will decline 5.4% year-over-year to 20.148 million bags, signaling gradually tightening supplies in the second half of the projection period. These figures suggest that while arabica coffee faces near-term pressure from weather-induced rainfall and inventory recovery, longer-term supply dynamics may support prices once current oversupply conditions moderate. For traders monitoring arabica coffee and broader commodity markets, the interplay between Brazil’s weather, inventory levels, and Vietnam’s surging production will remain pivotal in determining price direction through the spring months.