NEW YORK — Qahwa World
Coffee futures saw a sharp downturn on Friday, with Arabica hitting a five-and-a-half-month low and Robusta dropping to a three-and-a-half-week trough. March Arabica (KCH26) finished the session down 13.25 cents (-3.845%), while March ICE Robusta (RMH26) fell by $66 (-1.58%).
The primary pressure stems from the weather outlook in South America. Forecasts now indicate consistent rainfall across Minas Gerais, Brazil’s premier growing region, for the upcoming week. This shift toward a more favorable moisture profile has dampened the recent rally.
Further bearish sentiment is driven by a bolstered supply outlook. On December 4, Brazil’s Conab increased its 2025 production forecast by 2.4%, now estimating a total of 56.54 million bags. Simultaneously, Vietnam—the world’s top Robusta producer—continues to flood the market. Vietnam’s National Statistics Office noted a 17.5% year-over-year surge in 2025 exports, totaling 1.58 million metric tons. Production for the 2025/26 cycle is expected to climb 6% to a four-year high of 29.4 million bags, with Vicofa suggesting output could rise by 10% if conditions remain optimal.
Market inventories are also seeing a notable recovery. ICE-monitored Arabica stocks rebounded from a nearly two-year low in November to reach 461,829 bags as of mid-January. Robusta stocks followed a similar path, recovering from a one-year low in December to reach a nearly two-month high of 4,609 lots this past Friday.
However, some factors continue to provide an underlying floor for prices. Cecafe reported a sharp 18.4% drop in Brazilian green coffee exports for December, with Robusta shipments specifically tanking by 61%. Furthermore, recent data from Somar Meteorologia highlighted that rainfall in Minas Gerais was recently only 53% of the historical average, while the ICO reported a slight 0.3% dip in global exports for the current marketing year.
Looking ahead, the USDA Foreign Agriculture Service (FAS) projects record global production of 178.848 million bags for 2025/26. While the agency expects a 4.7% dip in Arabica output, a projected 10.9% jump in Robusta production is set to offset those losses. Despite the record harvest, FAS anticipates ending stocks will tighten by 5.4% to roughly 20.15 million bags.
