Dubai – Qahwa World
Coffee prices fell sharply on Wednesday after the Brazilian real lost some of its recent gains, prompting traders to liquidate long positions in coffee futures.
March Arabica (KCH26) closed down 16.25 points (-4.42%).
March Robusta (RMH26) fell 130 points (-3.04%).
Earlier in the session, Arabica had climbed to a two-and-a-half-week high, while Robusta reached a one-and-three-quarter-month peak before giving up gains. The weaker real makes Brazilian coffee more competitive for export, adding pressure on futures prices.
- Key Factors Driving the Market
Supporting Prices:
Brazilian coffee exports declined in December by 18.4%, totaling 2.86 million bags, with Arabica down 10% and Robusta down 61% year-on-year.
Below-average rainfall in Minas Gerais, Brazil’s main Arabica region, has raised concerns about supply, as the area received just 33.9 mm of rain last week—around half the historical average.
Pressuring Prices:
ICE coffee inventories have recovered after hitting multi-year lows, which weighs on prices.
Vietnam, the world’s top Robusta producer, saw its 2025 exports jump 17.5% to 1.58 million metric tons, with production rising 6% year-on-year.
Global coffee supply forecasts show a modest increase in total production, with Arabica down and Robusta up, creating mixed signals for the market.
- Market Outlook
Brazil’s 2025/26 production is projected to fall to 63 million bags, while Vietnam’s output is expected to rise to 30.8 million bags—a four-year high. Ending stocks for the season are forecasted to decline to 20.148 million bags, down 5.4% from the previous year, keeping supply concerns on traders’ radar.
