How Above-Normal Rainfall Is Shaping Coffee Prices Today

The coffee market is experiencing a period of conflicting pressures, with global production dynamics and weather patterns creating new challenges for pricing. Today’s movements in coffee prices reflect a complex interplay between abundant supply forecasts, rising inventories, and regional production disruptions—with Brazil’s extraordinary rainfall at the center of the story.

Arabica and Robusta Coffee Prices Show Divergent Trends

March arabica coffee futures (KCH26) posted a modest gain of 0.39% (+1.30) as the market balanced concerns about global oversupply. In contrast, March ICE robusta coffee (RMH26) slipped 2.24% (-92), slipping to its lowest level in four weeks. This divergence underscores the different pressures facing the two coffee varieties in today’s market environment. While arabica prices found some support from technical buying after failing to break key levels, robusta has faced more acute selling pressure from Vietnam’s surging export activity and tightening demand concerns.

Brazil’s Rainfall Surge Creates Headwinds for Coffee Prices

The most significant driver of downward pressure on coffee prices today comes from weather in Brazil, the world’s dominant arabica producer. According to Somar Meteorologia, the Minas Gerais region—responsible for roughly half of Brazil’s arabica output—experienced exceptionally heavy precipitation, receiving 69.8 mm of rain in the seven-day period ending January 30. This represents 117% above the historical average for this critical growing region. Such abundant moisture is expected to boost yields substantially, amplifying global supply expectations and weighing on coffee prices.

This weather development has compounded concerns about oversupply that were already pressuring prices before the latest rainfall data emerged. Market participants were already bracing for record production, and the precipitation forecast has only strengthened these bearish expectations.

Supply Expansion Compounds Pressure on Coffee Prices

Global supply dynamics are a major component of why coffee prices face continued headwinds today. Brazil’s government forecasting agency, Conab, upgraded its 2025 coffee harvest estimate by 2.4% on December 4, now projecting 56.54 million bags compared to the previous September forecast of 55.20 million bags. This revision signals confidence in robust production despite seasonal challenges.

Adding to this oversupply narrative is Vietnam’s explosive export growth. The country’s National Statistics Office announced that coffee exports for 2025 surged 17.5% year-over-year to 1.58 million metric tons. As the world’s leading robusta producer, Vietnam’s rising shipments are putting particular pressure on robusta coffee prices. Production forecasts for the 2025/26 season suggest output could increase by 6% to 1.76 million metric tons (29.4 million bags), potentially reaching a four-year peak. The Vietnam Coffee and Cocoa Association (Vicofa) indicated in October that favorable weather could push the crop 10% higher than the prior season—a prospect that is constraining robusta coffee prices globally.

ICE Inventories Undermine Price Support

Rising warehouse stocks are another bearish factor compressing coffee prices today. ICE-monitored arabica inventories, after sliding to a 1.75-year low of 398,645 bags on November 20, have rebounded to a 2.5-month high of 461,829 bags by mid-January. Similarly, ICE robusta stocks climbed from a one-year low of 4,012 lots (recorded December 10) to a 1.75-month high of 4,609 lots by late January. Higher inventories signal improving availability and reduce the urgency for buyers, which naturally suppresses coffee prices.

Brazilian Export Slump Offers Limited Support

Not all indicators are pointing downward for coffee prices. Brazil’s green coffee exports fell sharply in December, offering a modest counterweight to the bearish sentiment. According to Cecafe, Brazil’s coffee exports declined 18.4% to 2.86 million bags in December. Arabica shipments specifically fell 10% year-over-year to 2.6 million bags, while robusta exports plummeted 61% to just 222,147 bags. This export weakness may reflect logistics disruptions or seasonal patterns, but it does provide some underlying support to coffee prices by reducing near-term supply pressure.

Global Production Forecast Points to Persistent Headwinds

Looking at the broader global picture for coffee prices, the outlook remains challenged. The International Coffee Organization (ICO) reported in early November that worldwide coffee exports for the 2025/26 marketing year (October through September) are expected to reach 138.658 million bags, essentially flat year-over-year.

However, the more significant indicator comes from the USDA’s Foreign Agriculture Service (FAS), which released a comprehensive forecast on December 18 projecting global coffee production for 2025/26 at a record 178.848 million bags—up 2.0% year-over-year. This production expansion masks an important compositional shift: arabica output is forecast to decline 4.7% to 95.515 million bags, while robusta production is expected to surge 10.9% to 83.333 million bags. This trend explains why robusta coffee prices are experiencing greater pressure relative to arabica.

For Brazil specifically, the FAS anticipates a 3.1% decline in the 2025/26 harvest to 63 million bags—a modest contraction that may eventually provide some support to prices. Conversely, Vietnam’s output is projected to climb 6.2% to 30.8 million bags, a four-year high that will intensify pressure on coffee prices, particularly for robusta.

The global ending inventory forecast for 2025/26 is projected to contract by 5.4% to 20.148 million bags from 21.307 million bags in 2024/25, suggesting that despite near-term supply abundance, longer-term tightening could eventually underpin coffee prices. For now, however, the near-term outlook remains overshadowed by the supply buildout and favorable crop conditions shaping coffee prices today and in the months ahead.