Coffee Prices Tumble as Rain Forecasts in Brazil Trigger Heavy Selling

Coffee futures fell sharply on Thursday, pressured by weather forecasts that eased supply concerns in Brazil, the world’s largest producer. December arabica coffee (KCZ25) dropped 6.77%, while November ICE robusta (RMX25) lost 6.71%, marking the steepest declines in a week.

Brazil’s Weather and Harvest Drive Selloff

The selloff was largely driven by long liquidation, as traders reacted to predictions of showers across Brazil’s key coffee regions beginning next week. Additional pressure came from harvest progress: Brazil’s Cooxupe cooperative reported that its members’ harvest was nearly 99% complete as of September 12, underscoring abundant near-term supply.

Earlier this week, arabica prices had hit a seven-month high and robusta reached a three-week peak on concerns about dry weather during Brazil’s crucial flowering season. Minas Gerais, the country’s top arabica region, recorded no rainfall in the week ending September 13, according to Somar Meteorologia. Support also came from the U.S. NOAA, which placed a 71% chance of La Niña developing later this year, a phenomenon that could threaten the 2026/27 crop with extended drought.

Global Supply Trends: Mixed Signals

Beyond weather, global supply dynamics remain mixed. On the bullish side, U.S. tariffs on Brazilian coffee are tightening American supplies, as buyers pull back on new contracts. Inventories are also shrinking: ICE arabica stocks recently fell to a 16-month low, while robusta inventories dropped to a 1.5-month low. Brazil’s forecasting agency, Conab, also trimmed its 2025 arabica crop outlook by nearly 5%, adding to long-term supply worries.

However, strong output elsewhere is capping gains. Vietnam, the world’s top robusta exporter, shipped 7.8% more coffee in the first eight months of 2025 compared to last year. The USDA also expects global coffee production to reach a record 178.7 million bags in 2025/26, with robusta output climbing nearly 8%.

Outlook: Structural Deficit Persists

Even so, analysts at Volcafe warn that arabica remains in structural deficit, forecasting a shortfall of 8.5 million bags for 2025/26—the fifth straight year of undersupply.

For now, the market’s focus is on Brazil’s weather outlook. If the expected rains arrive, they could ease fears of crop stress and keep pressure on prices in the short term.

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