Coffee Prices Slide as Weather Risks Ease in Brazil and Vietnam

Coffee futures dropped sharply on Tuesday as improving weather in major coffee-growing countries eased earlier supply fears. Both arabica and robusta beans gave up their gains from the morning session, extending a pullback from recent highs.

December arabica coffee (KCZ25) fell -8.60 cents (-2.04%), while November robusta coffee (RMX25) dropped -150 points (-3.17%).

Market Turns Lower After Early Gains

Prices rallied early in the day on worries that dry weather in Brazil could threaten the upcoming 2026/27 coffee crop. However, forecasts of weekend rainfall in key producing areas quickly calmed those concerns.

Weather agency Climatempo predicted showers across Brazil’s coffee belt, including Minas Gerais, which helped push arabica prices down from an 8½-month high.

Meanwhile, robusta coffee retreated after Vietnam’s weather office said the chance of heavy rain in the Central Highlands had decreased. The region is Vietnam’s top coffee-growing zone, and the improved outlook reduced fears of crop damage.

Drought and Tariffs Still Influence the Market

Even with the pullback, supply worries have not completely disappeared. A Bloomberg Weather Analysis reported that Brazil’s coffee regions have been unusually dry, receiving only about 70% of average rainfall over the last month.

Adding to the tension, ICE-monitored inventories continue to decline. Arabica stocks dropped to a 19-month low of 465,910 bags, while robusta stocks fell to a 3-month low of 6,141 lots.

Trade friction is also tightening U.S. supply. The 50% tariff on coffee imports from Brazil has forced American buyers to cancel new contracts, cutting inflows from a country that supplies nearly one-third of the U.S.’s unroasted coffee.

La Niña Risk Adds More Uncertainty

The National Oceanic and Atmospheric Administration (NOAA) recently raised the chance of a La Niña weather pattern forming between October and December to 71%.

La Niña often brings hotter, drier weather to Brazil, which could stress coffee trees and reduce output. Since Brazil is the world’s largest arabica producer, even minor climate shifts can heavily influence global prices.

Trade Talks Provide Some Relief

Hopes for better U.S.–Brazil trade relations slightly pressured prices. U.S. Trade Representative Greer and Secretary of State Rubio said they held “very positive” discussions with Brazilian Foreign Minister Vieira. Both countries are working toward a meeting between President Trump and President Lulu, raising optimism that the 50% import tariffs might soon be reviewed.

Meanwhile, Brazil’s weather agency Somar Meteorologia reported that Minas Gerais received 44.7 millimeters of rain during the week ending October 18 — 136% of the historical average — easing local drought stress.

Vietnam’s Growing Output Weighs on Robusta

Robusta prices came under more pressure as Vietnam increased coffee exports. The Vietnam National Statistics Office said Jan–Sep 2025 exports climbed +10.9% year over year to 1.23 million metric tons.

For the 2025/26 season, output is projected to rise 6% to 1.76 MMT (29.4 million bags) — a four-year high. Vietnam remains the world’s top robusta producer, and larger harvests typically push prices lower.

Global Supply Remains Ample

The International Coffee Organization (ICO) reported that global coffee exports rose 0.2% year over year to 127.92 million bags between October and August, signaling that worldwide supply is still sufficient.

Even so, Brazil’s crop agency Conab reduced its 2025 arabica production estimate by 4.9% to 35.2 million bags and trimmed total coffee output to 55.2 million bags, down from 55.7 million in May.

Global Coffee Outlook

According to the USDA’s Foreign Agriculture Service (FAS), global coffee production for 2025/26 is forecast to increase 2.5% to a record 178.68 million bags.

Key projections include:

•Brazil: Output up 0.5% to 65 million bags

•Vietnam: Up 6.9% to 31 million bags, a 4-year high

•Ending stocks: Up 4.9% to 22.82 million bags

However, trader Volcafe expects an arabica deficit of 8.5 million bags for 2025/26 — larger than the 5.5 million-bag deficit in 2024/25 — marking the fifth consecutive year of shortages.

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