Global Coffee Quotes Face Pressure Amid Mixed Supply Signals and Weather Volatility

Market Performance and Supply Dynamics

Coffee futures showed divergent performance this week, with March arabica coffee down -0.55% while January robusta contracts gained +1.06%, reflecting broader uncertainty in the global coffee market. These price movements come as traders digest competing supply narratives across the world’s major producing regions.

The commodity faces structural headwinds from robust production forecasts. The USDA’s Foreign Agriculture Service reported that world coffee output in 2025/26 is projected to reach a record 178.848 million bags, representing a +2.0% year-over-year increase. Within this aggregate growth, arabica production is expected to decline by -4.7% to 95.515 million bags, while robusta output will surge +10.9% to 83.333 million bags. These divergent trends have created a tale of two markets within the global coffee complex.

Regional Production and Export Trends

Vietnam, the world’s largest robusta producer, continues to expand its footprint aggressively. The country’s 2025/26 coffee output is projected to climb +6% year-over-year to 1.76 MMT (29.4 million bags), marking a 4-year high. Recent export data underscores this momentum—Vietnam’s November coffee shipments jumped +39% year-over-year to 88,000 MT, with January-through-November exports rising +14.8% year-over-year to 1.398 MMT.

Brazil, meanwhile, faces production challenges despite earlier optimistic revisions. Conab, the country’s official crop forecasting agency, raised its 2025 production estimate by 2.4% to 56.54 million bags in December, though the USDA subsequently projected a -3.1% decline for 2025/26 to 63 million bags. Brazil’s largest arabica-growing region, Minas Gerais, received only 76% of its historical average rainfall during the week ended December 19, raising concerns about crop development.

Weather Impact and Supply Disruptions

Indonesia emerges as a critical supply variable following recent weather disruptions. Widespread flooding has damaged approximately one-third of the country’s arabica farms in northern Sumatra, prompting the Association of Indonesian Coffee Exporters and Industry to warn of potential export reductions of up to 15% for the 2025-26 season. As the world’s third-largest robusta producer, Indonesia’s supply shock carries outsized market implications.

Demand-Side Pressures and Inventory Dynamics

US coffee purchasing patterns reveal lingering tariff-induced distortions. American buyers reduced Brazilian coffee purchases by 52% during the August-October period when Trump-era tariffs were in effect, falling to 983,970 bags compared to the prior year. Although tariffs have since been reduced, US coffee inventories remain constrained.

ICE-monitored reserves present mixed signals. Arabica inventories fell to a 1.75-year low of 398,645 bags on November 20 before recovering to 456,477 bags, while robusta stocks touched an 11.5-month low of 4,012 lots before rebounding slightly. The International Coffee Organization reported that global coffee exports for the current marketing year (October-September) declined 0.3% year-over-year to 138.658 million bags, indicating tightening market conditions.

Forward Outlook

The USDA projected that 2025/26 ending coffee stocks will contract by -5.4% to 20.148 million bags from the prior year’s 21.307 million bags, suggesting ongoing supply pressure despite near-record production levels. For traders monitoring coffee quotes, the interplay between record global production and shrinking inventories will likely remain the critical variable determining price direction through the remainder of the marketing year.