How International Coffee Prices Are Being Shaped by Brazilian Currency and Global Supply Dynamics

International coffee price movements in early 2025 reflected a complex interplay of currencies, weather patterns, and production forecasts. The arabica market posted strong gains, with March contracts rising 3.09%, while robusta coffee gained 1.86%. These advances underscore the growing importance of macroeconomic factors and supply realities in shaping the global coffee market, where even a single producer’s currency movement can trigger significant price swings across international trading floors.

Brazilian Real Rally Drives International Coffee Prices Higher

The primary catalyst for the recent surge in coffee prices centered on the Brazilian real’s strength, as the currency rallied to a 20-month high. When Brazil’s currency strengthens, it discourages the country’s coffee producers from selling into international markets, as their export revenues convert into fewer reais. This dynamic directly supported international coffee prices by tightening supply. Brazil remains the world’s dominant arabica producer, giving the real’s movement outsized influence on global coffee markets.

Adding to the supportive backdrop, Brazil’s coffee exports contracted sharply in December 2024. Total green coffee shipments fell 18.4% year-over-year to 2.86 million bags, with arabica exports declining 10% to 2.6 million bags and robusta exports plummeting 61% to just 222,147 bags. Such export weakness stems partly from below-average rainfall in key growing regions. Minas Gerais, Brazil’s largest arabica coffee-growing area, received only 53% of its historical average rainfall in mid-January, with just 33.9 millimeters compared to normal levels. This weather stress provided additional support to international coffee prices by signaling potential supply constraints.

Global Inventory Dynamics Paint a Mixed Picture

The inventory situation for international coffee prices presents a nuanced outlook. Arabica stocks monitored by ICE fell to a 1.75-year low of 398,645 bags in November 2024, though they recovered to 461,829 bags by mid-January. Similarly, robusta inventories hit a one-year low in December before recovering to 4,609 lots by late January. While this rebound in stored supplies might suggest easing tightness, the inventory base remains historically lean, supporting prices at elevated levels.

Brazil’s domestic production outlook adds another layer to the international coffee price forecast. The country’s crop forecasting agency Conab raised its 2025 production estimate by 2.4% to 56.54 million bags in December 2024. However, the USDA’s Foreign Agriculture Service projected that Brazil’s 2025/26 production would actually decline 3.1% year-over-year to 63 million bags, indicating some disagreement about the trajectory and introducing uncertainty into international coffee price models.

Vietnam’s Surging Robusta Output Pressures Prices

Vietnam, as the world’s largest robusta producer, exerts a decisive influence on international coffee prices for that variety. The country’s 2025 coffee exports jumped 17.5% year-over-year to 1.58 million metric tons, according to Vietnam’s National Statistics Office. Looking ahead, Vietnam’s 2025/26 production is projected to climb 6% to 1.76 million metric tons, or approximately 29.4 million bags—a four-year high. The Vietnam Coffee and Cocoa Association indicated that output could climb 10% higher if weather conditions remain favorable throughout the season.

This surge in Vietnamese supplies pressures international coffee prices, particularly for robusta. The USDA forecasted that global robusta production in 2025/26 will rise 10.9% to 83.333 million bags, offsetting a projected 4.7% decline in arabica production to 95.515 million bags. Total world coffee production is expected to reach a record 178.848 million bags in 2025/26, up 2.0% year-over-year.

What the Forecasts Mean for International Coffee Prices Ahead

Despite ample global supplies on the horizon, international coffee prices face competing pressures. The International Coffee Organization reported in November that global exports for the 2024/25 marketing year fell just 0.3% year-over-year to 138.658 million bags, suggesting the market remains relatively tight. However, the USDA’s year-end forecast projected that ending stocks in 2025/26 will decline 5.4% to 20.148 million bags from 21.307 million bags in the prior year, indicating that supplies, while abundant, will tighten modestly.

For traders and producers monitoring international coffee prices, the outlook hinges on whether production gains—particularly Vietnam’s robusta surge and Brazil’s mixed signals—will outpace steady global demand. Currency movements, especially the Brazilian real, will continue to serve as a critical variable in determining which direction international coffee price trends break in the coming months.