Vietnam's Weather Woes Push Robusta Coffee Prices to 2-Week Heights

Robusta coffee futures experienced a notable surge today, climbing +107 points (+2.37%) in January contracts as adverse weather conditions threaten harvest operations in Vietnam’s leading coffee-producing regions. The price movement reflects growing concerns about crop disruption, with forecasts indicating prolonged rainfall ahead.

Weather Disruption Drives Robusta Higher

Vietnam, the world’s largest robusta coffee producer, faces significant harvesting delays due to heavy precipitation in Dak Lak province. Additional rain forecasts signal potential crop damage risks. This weather-related uncertainty has triggered short covering in the market, with robusta futures hitting their strongest levels in two weeks.

March arabica contracts also posted gains, advancing +2.15 points (+0.57%), supported by dollar weakness that encouraged position adjustments. The divergent drivers between robusta (weather concerns) and arabica (currency factors) highlight distinct supply dynamics between Vietnam and Brazil.

Supply Tightness Across the Board

Dwindling inventory levels are reinforcing the bullish tone. ICE arabica stocks plummeted to a 1.75-year low of 396,513 bags by Tuesday, while robusta inventories reached a 4-month low of 5,640 lots. US importers have significantly reduced Brazilian coffee purchases due to tariff pressures—transactions dropped 52% year-over-year from August through October compared to the prior year, totaling just 983,970 bags. Approximately one-third of America’s unroasted coffee sourcing depends on Brazilian supplies.

The Trump administration’s tariff structure has created complications for US importers. While reciprocal tariffs on certain commodities were reduced, Brazilian coffee remains subject to a separate 40% tariff on “national emergency” grounds. This policy uncertainty continues to pressure import flows and tighten domestic supply chains.

Vietnam’s Production Surge Offers Counterweight

Vietnam’s coffee sector is showing expansion signs that partially offset supply concerns. The Vietnam National Statistics Office reported January through October 2025 exports climbed 13.4% year-over-year to 1.31 million metric tons. Production forecasts for the 2025/26 season point to a 6% year-over-year increase reaching 1.76 million metric tons—a 4-year high.

The Vietnam Coffee and Cocoa Association indicated that 2025/26 output could rise 10% above the prior crop year if weather conditions stabilize. However, near-term harvest disruptions from current rainfall patterns may delay the realization of these production gains.

Brazil’s Tariff Relief and Production Outlook

Brazilian coffee markets experienced a mixed week. Wednesday’s rainfall forecasts for key growing regions initially pressured prices, as adequate moisture supports crop development. However, tariff discussions provided some support—the Trump administration’s announced reduction on commodity tariffs provided partial relief, though the full scope of exemptions remains unclear for coffee importers.

Brazil’s crop fundamentals appear supportive longer-term. StoneX projects 2026/27 production at 70.7 million bags including 47.2 million bags of arabica—representing a 29% year-over-year increase. Conab’s September estimate for 2025 arabica came in at 35.2 million bags, down 4.9% from May projections, though total Brazilian 2025 production was only marginally revised lower to 55.2 million bags.

Minas Gerais, Brazil’s largest arabica region, received only 19.8 mm of rainfall during the week ending November 14—just 42% of the historical average—adding to moisture deficit concerns in that area.

Global Market Equilibrium Under Pressure

International supply dynamics reveal a tightening picture despite production increases. The International Coffee Organization reported October-September marketing year global exports fell 0.3% year-over-year to 138.658 million bags. The USDA’s Foreign Agriculture Service projects 2025/26 world production expanding 2.5% year-over-year to a record 178.68 million bags, though this masks divergent trends: arabica down 1.7% to 97.022 million bags while robusta rises 7.9% to 81.658 million bags.

Vietnam’s projected 2025/26 output of 31 million bags—a 6.9% year-over-year increase—underscores the growing importance of natural coffee production from Vietnam in global supply calculations. Ending stocks are forecasted to rise 4.9% to 22.819 million bags, providing some cushion against supply disruptions.

The convergence of Vietnam’s near-term weather challenges, tight US import flows due to tariffs, and inventory draws is maintaining upward price pressure despite longer-term production expansion signals across major origins.