Coffee prices continued their decline today, extending Thursday’s sharp losses, as forecasts predict rainfall in Brazil and Vietnam. May arabica coffee (KCK25) dropped by 1.24% (-4.80), while May ICE robusta coffee (RMK25) fell 1.68% (-91).
Weather forecasts indicate that Brazil will experience several days of rainfall next week, alleviating concerns over prolonged dry conditions. Meteorological agency Somar reported that after a period of dry and hot weather, showers will return, improving soil moisture in key coffee-growing areas. This news has put pressure on coffee prices, as traders anticipate better crop conditions.
In Vietnam, the world’s largest robusta coffee producer, prices are also under pressure. The General Statistics Office of Vietnam reported that February coffee exports rose 6.6% year-over-year, reaching 169,000 metric tons. Additionally, forecasts predict a chance of daily rainfall over the next week in Vietnam’s Central Highlands, the country’s primary coffee-growing region, further easing supply concerns.
A rebound in coffee inventories is adding to the bearish sentiment. ICE-monitored robusta coffee inventories climbed to a one-month high of 4,356 lots, signaling increased availability. Meanwhile, arabica inventories had previously fallen to a nine-month low of 758,514 bags on February 18 but have since rebounded to 809,128 bags as of last Thursday.
As the world’s largest arabica producer, Brazil has seen significant shifts in coffee sales. According to Safras & Mercado, as of February 11, 88% of the country’s 2024/25 coffee harvest had already been sold, outpacing last year’s 79% and the five-year average of 82%. However, sales of the 2025/26 crop remain sluggish at 13%, well below the four-year average of 22%, suggesting that farmers are hesitant to sell due to market uncertainties.
Additionally, Brazil’s January green coffee exports fell 1.6% year-over-year to 3.98 million bags, according to Cecafe. The government’s crop forecasting agency, Conab, has revised its 2025/26 coffee production forecast downward by 4.4%, predicting a three-year low of 51.81 million bags. The 2024 estimate was also reduced by 1.1%, now standing at 54.2 million bags.
Weather-related challenges persist across major coffee-producing regions. Brazil has recorded below-average rainfall since April 2024, which has affected coffee trees during the crucial flowering stage. The country is experiencing its driest conditions since 1981, according to Brazil’s natural disaster monitoring agency Cemaden.
Colombia, the world’s second-largest arabica producer, is also facing the aftereffects of last year’s El Niño-induced drought, which had impacted coffee yields.
Vietnam’s robusta production has been affected by drought, with 2023/24 output dropping by 20% to 1.472 million metric tons, marking the smallest crop in four years. However, the USDA Foreign Agricultural Service (FAS) projects a slight decline in Vietnam’s 2024/25 robusta production to 27.9 million bags, compared to 28 million bags in the previous season.
Vietnam’s coffee exports also fell 17.1% year-over-year in early 2024, totaling 1.35 million metric tons, but expectations of improved weather conditions and better harvests in the coming months could ease supply pressures.
Despite some supply concerns, global coffee exports remain high. Brazil’s 2024 coffee exports surged 28.8% year-over-year, reaching a record 50.5 million bags, according to Conab. However, the International Coffee Organization (ICO) reported that global coffee exports fell 12.4% in December and declined 0.8% year-over-year in Q4 2024, signaling fluctuations in global trade.
The USDA’s December 2024 report projected that global coffee production will rise by 4% in the 2024/25 season, reaching 174.855 million bags. Arabica production is expected to increase by 1.5% to 97.845 million bags, while robusta output is set to grow 7.5% to 77.01 million bags. However, ending stocks are forecasted to drop by 6.6%, hitting a 25-year low of 20.867 million bags.
Looking ahead, supply concerns remain. Coffee consultancy Volcafe recently slashed its 2025/26 Brazil arabica coffee production estimate to 34.4 million bags, a downward revision of 11 million bags from its earlier forecast. Volcafe now projects a global arabica deficit of 8.5 million bags for 2025/26, widening from the 5.5 million bag shortfall expected in 2024/25. This would mark the fifth consecutive year of deficits, adding long-term price volatility to the market.
While coffee prices are currently under pressure due to improved rainfall forecasts, long-term supply concerns—especially in Brazil and Vietnam—could drive price fluctuations in the months ahead. The coffee market remains highly sensitive to weather conditions, inventory trends, and global export shifts, making it a space to watch for both producers and traders.