Coffee Prices Edge Lower as Rain Forecasts Boost Crops in Brazil and Vietnam

Key Points:

• Coffee prices dip slightly as rain forecasts improve crop prospects in Brazil and Vietnam.
• Declining ICE inventories provide medium-term support for prices.
• Trade optimism between the U.S. and Brazil adds mild downward pressure.

Coffee Prices Ease on Weather Forecasts

Coffee prices moved lower on Friday as favorable weather forecasts lifted expectations for higher yields in Brazil and Vietnam.

• December arabica coffee (KCZ25) fell 0.08%, while November robusta coffee (RMX25) declined 1.30%.
• Weather agency Climatempo forecasted weekend rains for Minas Gerais, Brazil’s largest arabica-growing region.
• In Vietnam’s Central Highlands, above-average rainfall is expected through the week, which should boost flowering and crop development.

In Dak Lak province, the top coffee-producing region, rainfall is expected to reach 70 mm over the next week, above the historical average of 61 mm.

Trade Developments Support Market Sentiment

U.S. Trade Representative Greer reported positive talks with Brazil about removing 50% tariffs on Brazilian imports.

He said a meeting between President Trump and President Lulu will be arranged soon.

The news lifted optimism that trade barriers could ease, though it also weighed slightly on near-term prices.

Tight Inventories Provide Underlying Support

Despite the mild price drop, limited supply continues to support the coffee market.

• ICE-monitored arabica coffee inventories dropped to a 1.5-year low of 493,783 bags.
• Robusta inventories fell to a 2.75-month low of 6,176 lots.

High tariffs have reduced new U.S. purchases of Brazilian beans, tightening domestic supplies.

Brazil accounts for roughly one-third of America’s unroasted coffee imports.

How weather and trade policy are shaping the next moves in global coffee markets.

Brazil’s Dry Weather Still a Concern

Earlier this week, arabica coffee prices touched a one-month high after reports of persistent dryness in Brazil.

According to Somar Meteorologia, Minas Gerais received only 48% of normal rainfall for the week ending October 11, raising concerns for the 2026/27 flowering season.

The National Oceanic and Atmospheric Administration (NOAA) recently increased the odds of a La Niña weather pattern to 71%, which could bring drier-than-usual conditions to South America and threaten Brazil’s upcoming harvest.

Global Coffee Outlook Remains Mixed

Brazil’s 2025 arabica coffee forecast was cut by 4.9% to 35.2 million bags, but rising robusta production is balancing global output.

• Vietnam’s 2025/26 coffee production is projected to rise 6% year-on-year to a four-year high of 1.76 million metric tons.
• The USDA expects global coffee production to reach a record 178.68 million bags in 2025/26, supported by strong robusta output.
• Despite this, Volcafe predicts an arabica deficit of 8.5 million bags, marking the fifth straight year of shortages.

Outlook

Coffee prices are likely to stay range-bound in the short term.

While rain forecasts improve supply expectations, falling inventories and weather risks in Brazil could prevent major price declines.

Traders will continue monitoring rainfall patterns and trade negotiations for the next market direction.

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