Dubai – Qahwa WORLD
Global coffee prices showed mixed movement on Tuesday, with market sentiment shaped by supply concerns in Southeast Asia and updated production forecasts from major producing countries.
Arabica coffee futures for March delivery edged lower, while robusta contracts for January moved higher. The divergence reflects differing supply dynamics for the two varieties.
Prices have received support from extensive flooding in Indonesia, a key coffee producer. Recent reports indicate that floodwaters have affected roughly one-third of arabica coffee farms in northern Sumatra. Robusta-growing areas, however, appear to have suffered less damage, limiting the overall impact on Indonesia’s export capacity.
Weather developments in Brazil also influenced the market. According to Somar Meteorologia, Minas Gerais — the country’s largest arabica-producing region — recorded 38.3 millimeters of rainfall during the week ending December 19. This amount represents approximately 76% of the historical weekly average, easing concerns about drought stress in key growing zones.
Despite these supportive factors, expectations of ample global supply continue to weigh on prices. Brazil’s agricultural forecasting agency revised its 2025 coffee production estimate upward in early December, projecting total output at 56.54 million bags, compared with a previous estimate of 55.20 million bags.
Robusta prices remain under pressure due to strong export flows from Vietnam. Official statistics showed that Vietnam’s coffee exports surged sharply in November, with shipments rising significantly compared to the same month last year. Cumulative exports for the January–November period also posted strong year-on-year growth.
Arabica prices, meanwhile, found some support from lower Brazilian export volumes. Data from Brazil’s coffee exporters association indicated a notable decline in green coffee exports in November compared with the same period last year.
Inventory levels on ICE exchanges have also played a role in recent price movements. Certified arabica stocks fell to their lowest level in more than a year in late November before rebounding in December. Robusta inventories followed a similar pattern, declining to multi-month lows earlier in the month and then partially recovering.
Trade flows to the United States added another layer of complexity. Purchases of Brazilian coffee by U.S. buyers dropped sharply during the period when higher tariffs were in place earlier in the year. Although those tariffs have since been reduced, U.S. inventories remain tight following the earlier slowdown in imports.
Looking ahead, rising production in Vietnam is seen as a bearish factor. Forecasts for the 2025/26 season suggest higher output, with industry groups indicating that favorable weather conditions could push production well above last year’s levels. Vietnam remains the world’s leading producer of robusta coffee.
At the global level, some indicators point to tighter supply. The International Coffee Organization recently reported a slight decline in global coffee exports for the current marketing year.
However, longer-term projections suggest overall production growth. The U.S. Department of Agriculture expects global coffee output in the 2025/26 season to reach a record level, driven by increased robusta production, even as arabica output is forecast to decline. Ending stocks are projected to fall compared with the previous season, reflecting ongoing demand and inventory adjustments.
