Coffee Prices Decline as Global Supply Outlook Strengthens

Coffee prices fell sharply today as new reports suggested that global supplies may be larger than earlier expected. March arabica futures dropped nearly 2%, while January robusta futures slipped by a similar margin, pushing robusta to a fresh 2.5-month low.

Brazil and Vietnam Boost Supply Expectations

The biggest factor dragging prices down is the improved output forecast from major coffee-producing countries.

Brazil’s crop agency, Conab, recently raised its 2025 production estimate to 56.54 million bags, higher than its previous projection. This signals a strong season ahead and increases expectations for abundant supply.

Vietnam, the world’s top producer of robusta, is also adding pressure to the market. Fresh data revealed that coffee exports in November surged 39% year-on-year, while shipments for the first 11 months of the year rose almost 15%. Forecasts for the 2025/26 season also point to a production increase of at least 6%, assuming favorable weather continues.

Weather Concerns and Export Declines Support Arabica Prices

Despite the bearish supply outlook, arabica found some support this week. Exporter group Cecafe reported that Brazil’s green coffee exports for November fell 27% compared to last year. Additionally, dry conditions in Minas Gerais — Brazil’s largest arabica-producing region — continue to raise concerns. Recent rainfall reached only 17% of the region’s historical average, creating uncertainty for future yields.

Global coffee prices are weakening as forecasts point to abundant supplies and stronger production from major coffee‑producing countries.

Regulatory Delays and Inventory Levels Influence Market Sentiment

Market sentiment was also shaped by regulatory news from Europe. The European Parliament approved a one-year delay to the EU deforestation rule, allowing member countries to continue importing coffee without stricter environmental checks for now. This delay is expected to keep supply flowing smoothly.

On the inventory side, ICE-monitored arabica stocks recently hit a 1.75-year low before recovering slightly, while robusta inventories remain near an 11-month low. Earlier U.S. tariffs on Brazilian coffee also reduced American purchases, leaving domestic stockpiles tighter than usual.

Overall, rising production forecasts, strong export numbers, and regulatory delays are weighing heavily on coffee prices. However, weather risks and fluctuating inventories may still influence market direction in the months ahead.

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