Key Takeaways
- Coffee prices settled mixed, with arabica futures rising and robusta futures declining.
- Global coffee exports showed a slight year-over-year decrease, contributing to tighter supply concerns.
- Strength in the Brazilian real supported arabica prices by discouraging exports from Brazil.
- Concerns about Vietnamese coffee supplies eased after a typhoon caused no significant damage to growing regions.
- Shrinking ICE coffee inventories, particularly for arabica, are a bullish factor for prices.
- Favorable rainfall in Brazil and the potential for a La Niña weather system could impact future coffee crops.
- Increased coffee production and export forecasts from Vietnam suggest bearish pressure on robusta prices.
Market Overview and Influencing Factors
December arabica coffee futures (KCZ25) closed higher on Monday, gaining 1.70%. In contrast, January ICE robusta coffee futures (RMF26) experienced a slight decline of 0.54%. This mixed performance reflects differing market dynamics influencing each coffee variety.
Global coffee supplies played a significant role in market sentiment. The International Coffee Organization (ICO) reported a marginal decrease of 0.3% in global coffee exports for the current marketing year (October-September), reaching 138.658 million bags. This tightening supply picture provided underlying support for coffee prices.
Arabica Coffee Support
Arabica coffee prices found additional strength due to the appreciation of the Brazilian real against the dollar, which reached a five-week high. A stronger real typically discourages coffee exports from Brazil, as it makes the commodity more expensive for international buyers, thereby tightening global arabica supplies.
Robusta Coffee Trends
Robusta coffee faced downward pressure following initial assessments that the recent Typhoon Kalmaegi did not cause significant damage to Vietnam’s coffee-producing regions. Vietnam is a major global supplier of robusta coffee, and expectations of unhindered production can weigh on prices.
Inventory Levels and Tariffs
💡 Shrinking ICE coffee inventories continue to be a supportive factor for coffee prices. The imposition of substantial tariffs on US imports from Brazil has directly led to a notable drawdown in ICE coffee inventories. Specifically, ICE-monitored arabica inventories fell to a 1.75-year low of 416,703 bags. Similarly, ICE robusta coffee inventories decreased to a 3.75-month low of 5,873 lots.
The 50% tariffs on Brazilian coffee imports into the United States have caused American buyers to hesitate or cancel new purchase contracts. Given that approximately one-third of the unroasted coffee consumed in the US originates from Brazil, this tariff-driven reluctance to buy is further constricting US coffee supplies.
Brazilian Weather and Crop Outlook
📊 Ample rainfall in key Brazilian coffee-growing regions is providing some relief from dryness concerns, which is a bearish indicator for coffee prices. Somar Meteorologia reported that Minas Gerais, Brazil’s largest arabica coffee-producing area, received 72.1 mm of rain during the week ending November 7th. This amount represents 160% of the historical average for the period.
⚡ On September 16th, the National Oceanic and Atmospheric Administration (NOAA) increased the likelihood of a La Niña weather system forming in the southern hemisphere between October and December to 71%. Such a system could bring excessive dry weather to Brazil, potentially harming the 2026/27 coffee crop. Brazil is the world’s foremost producer of arabica coffee.
Vietnamese Production and Exports
📉 Increased supplies from Vietnam are considered a bearish factor for robusta coffee prices. The Vietnam National Statistics Office reported a year-over-year increase of 13.4% in Vietnamese coffee exports for January-October 2025, totaling 1.31 million metric tons. Projections indicate that Vietnam’s 2025/26 coffee production is expected to rise by 6% year-over-year to 1.76 million metric tons (approximately 29.4 million bags), marking a four-year high.
The Vietnam Coffee and Cocoa Association (Vicofa) anticipates that Vietnam’s coffee output for the 2025/26 season could be up to 10% higher than the previous crop year, provided weather conditions remain favorable. Given Vietnam’s position as the world’s largest producer of robusta coffee, these upward revisions in production and export figures exert downward pressure on robusta prices.
Official Crop Estimates and Forecasts
📌 Conab, Brazil’s official crop forecasting agency, revised its Brazil 2025 arabica coffee crop estimate downward by 4.9% to 35.2 million bags on September 4th, from a previous May forecast of 37.0 million bags. Conab also reduced its total Brazil 2025 coffee production estimate by 0.9% to 55.2 million bags, compared to the May estimate of 55.7 million bags.
The USDA’s Foreign Agriculture Service (FAS) projected on June 25th that global coffee production for 2025/26 would reach a record 178.68 million bags, an increase of 2.5% year-over-year. This forecast includes a 1.7% decrease in arabica production to 97.022 million bags and a significant 7.9% increase in robusta production to 81.658 million bags. The FAS forecasts Brazil’s 2025/26 coffee production to rise by 0.5% year-over-year to 65 million bags, and Vietnam’s output to increase by 6.9% year-over-year to a four-year high of 31 million bags. Furthermore, the FAS anticipates that global coffee ending stocks for 2025/26 will climb by 4.9% to 22.819 million bags, up from 21.752 million bags in 2024/25.
Expert Summary
Monday’s coffee market saw arabica prices rise while robusta futures declined, influenced by a complex interplay of global supply data and currency movements. Tightening inventories and a strong Brazilian real supported arabica, whereas expectations of robust Vietnamese output weighed on robusta. Weather patterns and US import tariffs continue to be key factors to monitor for future price trends.
