Arabica Coffee Price Tumbles as Brazil Forecasts Steady Rainfall

The coffee market is experiencing significant downward pressure today, with arabica coffee price movements reflecting growing concerns about adequate supply levels ahead. March arabica futures have retreated to a 5.5-month low, declining 3.65% on the day, while robusta contracts slipped 1.77% to a 3.5-week floor. This sharp pullback in arabica coffee price action comes as meteorologists predict consistent rainfall throughout the coming week in Minas Gerais, the heartland of Brazil’s coffee production.

Weather Forecasts Drive Immediate Arabica Price Pressure

Steady rain predictions in Minas Gerais are weighing heavily on trader sentiment for arabica coffee price trends. When ample moisture reaches Brazil’s primary growing region, it relieves any drought concerns that might have supported prices. Somar Meteorologia reported that during the week ending mid-January, Minas Gerais received 33.9 mm of rainfall, representing 53% of historical averages—below normal but trending toward normalization with continued forecasts.

This weather trajectory contrasts sharply with the tighter supply conditions that previously underpinned coffee prices, signaling a fundamental shift in market dynamics as growing season conditions improve.

Global Production Surge Undercuts Arabica Coffee Market

A dramatic expansion in worldwide coffee output is reshaping the arabica coffee price outlook through 2025-26. The USDA’s Foreign Agriculture Service projects global coffee production will climb 2.0% year-over-year to a record 178.848 million bags in the 2025-26 season. While arabica production is expected to decline 4.7% to 95.515 million bags, this decrease is more than offset by a 10.9% surge in robusta supply to 83.333 million bags.

Brazil’s projected output tells a particularly bearish story for arabica coffee prices. The country’s 2025-26 production forecast stands at 63 million bags, marking a 3.1% year-over-year decline from prior estimates. Yet this contraction pales compared to the explosive growth anticipated from Vietnam, the world’s dominant robusta producer. Vietnam’s coffee exports jumped 17.5% year-over-year in early 2025 to 1.58 million metric tons, with production projections climbing 6.0% to reach 1.76 million metric tons or 29.4 million bags in 2025-26—a four-year high.

Rising Inventories Extend Headwinds for Coffee Price Recovery

Inventory dynamics further complicate the arabica coffee price picture. ICE-monitored arabica stocks tumbled to a 1.75-year floor of 398,645 bags in November but have rebounded substantially to 461,829 bags as of mid-January, marking a 2.5-month peak. Robusta inventories followed a similar pattern, dropping to a one-year low of 4,012 lots in December before climbing to 4,609 lots most recently.

This inventory recovery signals expanding supply availability entering the market, reinforcing downward pressure on arabica coffee prices as traders anticipate growing liquidity and less urgent purchasing behavior.

Export Flows Reflect Complex Global Supply Dynamics

Brazil’s export performance offers a mixed signal but ultimately reinforces the supply abundance narrative. In December, Brazilian green coffee exports declined 18.4% to 2.86 million bags, with arabica shipments falling 10% year-over-year to 2.6 million bags and robusta exports tumbling 61% year-over-year to just 222,147 bags. This slowdown likely reflects logistics and seasonal factors rather than constrained supply.

Conversely, the International Coffee Organization reported that global coffee exports for the current marketing year (October-September) fell just 0.3% year-over-year to 138.658 million bags, indicating overall market stability despite regional variations.

Long-Term Production Outlook Pressures Arabica Coffee Price Prospects

Looking ahead, global ending stocks for 2025-26 are projected to decline 5.4% to 20.148 million bags from 21.307 million bags in 2024-25, yet this reduction emerges in the context of record overall production. Conab, Brazil’s official crop forecasting agency, raised its 2025 total Brazilian coffee production estimate by 2.4% to 56.54 million bags in December, signaling continued abundance.

The structural backdrop for arabica coffee prices remains challenging. With production records being set, inventory levels recovering from lows, and export activity normalizing, the confluence of these factors suggests sustained pressure on arabica coffee price momentum through the first half of 2026, barring any significant weather disruptions or unexpected supply constraints.