Dubai – Qahwa World
Coffee futures rebounded today following early declines, buoyed by weather forecasts signaling limited rainfall in Brazil’s key coffee-producing regions over the coming week. March arabica (KCH26) gained +1.40 points (+0.39%), while March ICE robusta (RMH26) rose +52 points (+1.31%).
Earlier in the session, arabica fell to a 1.5-week low, pressured by a stronger U.S. dollar, as the DXY index reached a six-week high.
Last week, arabica prices surged to a one-month high amid below-average precipitation in Brazil, the world’s largest arabica coffee exporter. Data from Somar Meteorologia showed that Minas Gerais, Brazil’s main arabica-growing state, received just 26.5 mm of rainfall during the week ending January 9 — only 29% of the historical average.
Shrinking inventories on ICE exchanges are also lending support to prices. Arabica stocks tracked by ICE dropped to a 1.75-year low of 398,645 bags on November 20, before climbing to a 2.5-month high of 461,829 bags last Wednesday. Robusta inventories fell to a one-year low of 4,012 lots on December 10 but recovered to a five-week high of 4,278 lots later in December.
However, a strong supply outlook remains a headwind. Brazil’s crop agency Conab raised its 2025 coffee production estimate by 2.4% in December to 56.54 million bags, up from the September projection of 55.20 million bags.
Vietnam, the largest robusta producer, is also expanding its output, which pressures robusta prices. Its 2025 coffee exports jumped 17.5% year-on-year to 1.58 million metric tons, according to the country’s National Statistics Office. Vietnam’s coffee production for 2025/26 is forecast to rise 6% year-on-year to 1.76 MMT (29.4 million bags), marking a four-year high, with the Vietnam Coffee and Cocoa Association projecting a potential 10% increase if weather conditions remain favorable.
Global coffee supply data show a mixed picture. The International Coffee Organization (ICO) reported November 7 that world coffee exports declined 0.3% year-on-year to 138.658 million bags for the current marketing year (October–September). Meanwhile, the USDA’s Foreign Agriculture Service predicted a 2% increase in global coffee production in 2025/26 to 178.848 million bags, driven by a 10.9% jump in robusta output to 83.333 million bags, despite a 4.7% drop in arabica production to 95.515 million bags. The report also projected Brazil’s production would fall 3.1% to 63 million bags, while Vietnam’s output rises 6.2% to a four-year high of 30.8 million bags. Ending stocks are expected to decline 5.4% to 20.148 million bags from 21.307 million bags in 2024/25.
