Dubai – Qahwa World
Arabica coffee futures moved higher on Wednesday, reaching their strongest level in about four weeks, while robusta prices weakened. March arabica contracts gained modestly, supported by weather concerns in Brazil and currency movements, whereas robusta futures declined amid ample supply from Vietnam.
Lower-than-normal rainfall across key Brazilian growing regions is providing support to arabica prices. Recent data from Somar Meteorologia showed that Minas Gerais—Brazil’s largest arabica-producing state—received significantly less rainfall than usual in late December, raising concerns about crop development. Brazil is the world’s top producer of arabica coffee, making weather conditions there especially influential for global prices.
Additional support came from a firmer Brazilian real, which reached its strongest level in roughly a month against the US dollar. A stronger currency tends to slow export selling, as Brazilian producers receive fewer local-currency returns from dollar-based coffee sales.
In contrast, robusta prices are under pressure due to strong export volumes from Vietnam, the world’s largest robusta supplier. Official figures indicate that Vietnam’s coffee exports rose sharply in 2025, adding to near-term supply availability.
Inventory trends remain a key focus for traders. Arabica stocks monitored by ICE had previously fallen to their lowest level in nearly two years before rebounding slightly in recent weeks. Robusta inventories also declined to a one-year low earlier in December but have since shown signs of recovery.
Demand patterns have also influenced the market. Earlier US tariffs on Brazilian imports reduced American purchases of Brazilian coffee, leading to tighter inventories in the United States. Although those tariffs have since been reduced, buying activity has not yet fully recovered.
Looking ahead, expectations of larger global supplies are limiting further price gains. Brazil’s crop agency recently raised its forecast for the country’s 2025 coffee output, citing improved conditions. Vietnam is also expected to increase production in the upcoming season, with industry groups projecting strong output if favorable weather continues.
On the global stage, export data suggest some tightening, as shipments declined slightly year over year. However, longer-term projections from the USDA point to record world coffee production in 2025/26, driven by growth in robusta output that more than offsets a decline in arabica production. Ending global coffee stocks are forecast to fall modestly, keeping supply concerns on the radar despite higher overall production.
