Poor Rainfall in Brazil Lifts Arabica Coffee Prices Amid Mixed Market Signals
Arabica coffee futures climbed on May 28, 2025, as concerns about weak rainfall in Brazil’s top coffee-growing region threaten the upcoming harvest. While robusta prices plunged to a 7-week low, Arabica gained 0.19% due to weather-related supply fears. Despite overall rising inventories and global production forecasts, drought conditions in Brazil and falling exports support arabica prices in the short term.
May 28, 2025 — Arabica coffee futures saw modest gains on Tuesday, supported by dry weather in Brazil’s key growing region, Minas Gerais. July arabica coffee (KCN25) closed up by +0.70 points (+0.19%), while July robusta (RMN25) dropped -94 points (-1.96%) to hit a 7-week low.
According to Somar Meteorologia, rainfall in Minas Gerais totaled just 0.3 mm for the week ending May 24—only 4% of the historical average. This dryness has raised concerns about yield losses in Brazil, the world’s largest arabica producer.
Although weather concerns lifted arabica, coffee prices remain under pressure due to ample global supplies. On May 20, the USDA’s Foreign Agricultural Service (FAS) projected Brazil’s 2025/26 coffee output will rise by 0.5% year-over-year (y/y) to 65 million bags. Vietnam’s output is expected to jump 6.9% y/y to 31 million bags, reinforcing a surplus outlook for robusta.
Inventories have also grown. ICE-monitored arabica coffee stocks climbed to a 3.75-month high of 892,468 bags on Tuesday, while robusta inventories reached an 8-month high last Friday at 5,438 lots. These inventory levels have contributed to a bearish sentiment, particularly for robusta.
The USDA has also forecast a 5.1% increase in Honduras’ 2025/26 coffee production, reaching 5.8 million bags. Brazilian estimates have been revised upwards as well. Safras & Mercado now projects 65.51 million bags for 2025/26, up from 62.45 million. Similarly, Brazil’s crop agency Conab lifted its estimate to 55.7 million bags, up from 51.81 million in January.
Demand-side concerns are weighing on prices. Major buyers including Starbucks, Hershey, and Mondelez International have indicated that new U.S. import tariffs could increase prices and lower sales volumes.
However, declining exports from Brazil could help stabilize prices. Cecafe reported a 28% y/y drop in green coffee exports for April, totaling 3.05 million bags. Year-to-date (January–April) exports were down 15.5% y/y at 13.186 million bags, tightening global supply.
Vietnam’s robusta sector is grappling with significant weather-related challenges. The 2023/24 crop fell 20% to 1.472 MMT—the smallest in four years—due to drought. For 2024, Vietnam’s coffee exports are down 17.1% y/y to 1.35 MMT. From January to April 2025, exports fell another 9.8% y/y. The Vietnam Coffee and Cocoa Association recently revised its 2024/25 production forecast down to 26.5 million bags from 28 million.
Still, Rabobank forecasts that Brazil’s 2025/26 robusta crop will reach a record 24.7 million bags, up 7.3% y/y, signaling mixed signals in the robusta segment.
The USDA’s December report projected that 2024/25 global coffee production will rise by 4% to 174.855 million bags. Arabica output is expected to increase 1.5% to 97.845 million bags, while robusta will jump 7.5% to 77.01 million bags. Yet, global ending stocks are forecast to fall by 6.6% to a 25-year low of 20.867 million bags, down from 22.347 million in 2023/24.
Additionally, Brazil’s 2024/25 production is now projected at 66.4 MMT, down from an earlier estimate of 69.9 MMT. End-of-season inventories are estimated at just 1.2 million bags, a 26% y/y decline.
Volcafe expects Brazil’s 2025/26 arabica production to drop to 34.4 million bags due to prolonged drought. This marks an 11 million bag decrease from previous forecasts. As a result, Volcafe projects a global arabica deficit of 8.5 million bags—larger than the 5.5 million bag deficit in 2024/25 and the fifth consecutive year of arabica shortages.The arabica coffee market is facing mixed signals as poor weather in Brazil supports prices, while global production forecasts and rising inventories exert downward pressure. The robusta segment, meanwhile, is struggling with both oversupply in inventories and underperformance in Vietnam. Traders and stakeholders will be watching Brazilian rainfall patterns and export data closely as they influence the trajectory of global coffee prices.
