Dubai – Qahwa World
Coffee futures ended lower on Thursday after surrendering earlier gains, pressured by a strengthening U.S. dollar that prompted investors to reduce long positions.
March arabica coffee futures declined about 0.8%, while March robusta futures slipped slightly, losing roughly 0.3% by the close.
The pullback came as the U.S. Dollar Index climbed to its highest level in four weeks, making dollar-denominated commodities like coffee less attractive to buyers. This currency move outweighed earlier support that had pushed arabica prices to a one-month high.
Earlier in the session, coffee prices found strength from weather concerns in Brazil. Rainfall in key growing areas remained below normal, particularly in Minas Gerais, the country’s largest arabica-producing region. Weekly precipitation there reached just under two-thirds of the historical average, renewing worries about crop development.
Robusta prices, however, continued to face headwinds from expanding supplies in Vietnam. The country reported a sharp increase in coffee exports for 2025, reflecting strong output from the world’s leading robusta producer.
Inventory trends offered mixed signals. Exchange-tracked arabica stocks, while still relatively low, have rebounded from recent multi-year lows. Robusta inventories also recovered modestly after hitting their weakest levels in over a year.
Trade flows have also influenced the market. Earlier U.S. tariffs reduced American purchases of Brazilian coffee during late summer and early autumn, sharply cutting imports during that period. Although tariffs have since been reduced, U.S. coffee supplies remain tight.
On the supply side, expectations of ample global production continue to weigh on prices. Brazil’s crop agency recently revised its 2025 coffee output forecast higher, while Vietnam is projected to harvest one of its largest crops in several years if favorable weather persists.
That said, some longer-term data point to tightening conditions. Global coffee exports edged lower in the current marketing year, according to international industry figures.
Looking ahead, the USDA projects world coffee production to reach a record level in the 2025/26 season, driven by strong growth in robusta output that offsets a decline in arabica production. Ending global stocks are expected to fall, suggesting that while near-term supply is ample, the balance could tighten further down the road.
