Dollar Weakness Supports Robusta Coffee Prices Amid Mixed Supply Signals

The coffee market is showing considerable strength as the U.S. dollar continues its downward slide. March arabica futures climbed 1.68% to new levels, while March robusta coffee prices surged 1.57%, benefiting from a weakening greenback that fell another 0.6% to reach a 4-month low. This inverse relationship between currency movements and robusta coffee prices reflects how commodity-linked markets react when the dollar loses ground, making coffee more attractive to international buyers.

Arabica and Robusta Gain Ground as Currency Headwinds Ease

Both arabica and robusta coffee futures are benefiting from the broader dollar depreciation. Historically, a weaker dollar tends to support commodity prices across the board, and coffee is proving no exception to this pattern. The simultaneous strength in both varieties masks important differences in their underlying supply dynamics—a contrast that will likely shape future price movements differently for each grade.

Brazilian Supply Pressures Provide Support Despite Production Optimism

Brazil, the world’s dominant arabica producer, is experiencing supply-side pressures that continue to underpin coffee prices generally. According to data released recently, Brazil’s total green coffee exports fell sharply year-over-year, with arabica shipments declining 10% compared to the prior year and robusta coffee exports down significantly at 61% year-over-year. These export declines suggest tightness in available supplies reaching global markets.

The situation is compounded by weather challenges in Brazil’s key growing regions. Minas Gerais, the country’s largest arabica coffee-growing area, received only about half of its historical average rainfall during the recent period, raising concerns about the health of the current crop. However, looking ahead, Brazil’s agricultural ministry raised its 2025 total coffee production estimate, suggesting that long-term supply pressures may ease if weather conditions cooperate.

Vietnam’s Robust Production Weighs on Robusta Coffee Prices

While Brazilian constraints support the market broadly, Vietnam—the world’s largest robusta coffee producer—is telling a different story. Vietnam’s coffee exports surged 17.5% year-over-year to reach 1.58 million metric tons, driven by expanding production capacity. The country’s robusta output for the 2025/26 cycle is projected to climb 6% year-over-year, potentially reaching a 4-year high if favorable weather persists. This robust expansion from Vietnam represents headwinds for robusta coffee prices, given the grade’s heavy reliance on Vietnamese supplies.

ICE Inventory Rebalancing Signals Transition in Market Dynamics

Storage data from ICE reveals important shifts in market balance. Arabica inventories, which had fallen to 1.75-year lows in November, have rebounded modestly to 2.5-month highs recently. Similarly, robusta coffee inventory levels have risen from their December lows. While these rebounds in ICE storage reflect improved logistics rather than oversupply, they suggest that supply tightness may be easing somewhat, which could eventually put pressure on robusta coffee prices if the trend accelerates.

Global Production Forecast Shows Record Volumes Ahead

The broader picture from international forecasters points to expanding global coffee supplies. The USDA’s Foreign Agriculture Service projects that world coffee production for the 2025/26 crop year will reach a record 178.848 million bags, up 2% year-over-year. However, this aggregate gain masks important shifts between grades: arabica production is expected to fall 4.7% while robusta production surges 10.9%. Vietnam’s output is anticipated to reach 30.8 million bags for 2025/26—a 4-year peak—while Brazil’s production is forecast to decline 3.1%.

Ending global coffee stocks are projected to fall 5.4% from current levels, suggesting that the market remains relatively tight despite expanding production. This balance between record crops and declining inventories will be critical in determining whether robusta coffee prices can maintain recent gains or face renewed selling pressure from anticipated larger harvests.

Outlook: Market at Inflection Point

The current configuration of supportive currency movements, weather-related supply concerns in Brazil, and the anticipated surge in Vietnamese robusta supplies creates a complex environment for robusta coffee prices. The International Coffee Organization recently noted that global exports for the current marketing year fell slightly year-over-year, reinforcing the sense of constrained supply. Yet forward-looking production estimates suggest this tightness is temporary. Traders watching robusta coffee prices should monitor both Brazilian weather developments and emerging data on harvest flows from Vietnam, as these will ultimately determine whether dollar weakness alone can sustain the current market strength.