Brazilian Coffee Under Pressure: Supply Surge Dampens Price Outlook

Global coffee markets are caught between conflicting forces as of mid-February 2026. Arabica futures showed modest gains on technical recovery, but the broader market landscape reveals growing headwinds for coffee prices. Brazilian coffee—which represents a critical pillar of global supply—faces mounting pressure from an oversupply outlook, even as rainfall patterns support strong crop development. The picture becomes clearer when examining the interplay between expanding global coffee production, shifting export patterns, and recovering inventory levels that collectively weigh on market sentiment.

Minas Gerais Rainfall Boosts Yields But Pressures Prices

Recent weather patterns in Brazil’s primary coffee region tell a story of agricultural abundance turning into a pricing challenge. Somar Meteorologia reported that Minas Gerais, home to the nation’s largest arabica coffee-growing area, received 69.8mm of precipitation in late January—amounting to 117% of the historical average for that period. This surplus moisture is undeniably positive for coffee yields and crop health.

Yet the paradox is clear: better harvests translate directly into lower prices. The rainfall data explains why arabica coffee struggled despite some technical short covering that briefly lifted prices into positive territory. Coffee prices have retreated over the past week amid forecasts predicting steady precipitation across the main growing region, which reinforces expectations of ample coffee supplies reaching the market. This supply abundance becomes bearish pressure on prices despite higher production potential.

Conab, Brazil’s official crop forecasting agency, amplified these concerns on December 4 when it raised its total Brazilian coffee production estimate by 2.4% to 56.54 million bags, compared to a September projection of 55.20 million bags. Such production growth—while economically positive for growers—creates downside risk for prices in an already-competitive market.

Vietnam’s Robusta Surge Weighs on Global Market

While brazilian coffee grapples with supply expansion, Vietnam compounds market pressure by increasing its own output dramatically. Vietnam, the world’s largest robusta producer, reported surging exports in early 2025 that jumped 17.5% year-over-year to 1.58 MMT, according to Vietnam’s National Statistics Office.

The trend extends beyond current exports. Vietnam’s 2025/26 coffee production is projected to climb 6% year-over-year to 1.76 MMT—equivalent to 29.4 million bags and marking a four-year high. The Vietnam Coffee and Cocoa Association (Vicofa) indicated that output could rise an additional 10% if weather conditions remain favorable, raising the possibility of even tighter price conditions for robusta contracts.

This vietnamese expansion directly challenges robusta prices, which have already retreated to four-week lows. March ICE robusta coffee fell 92 points to decline 2.24%, reflecting this competitive pressure. The supply dynamics between Brazil’s arabica expansion and Vietnam’s robusta acceleration create a dual headwind for coffee traders.

Ample Inventory Recovery Signals More Price Headwinds

Global coffee inventory levels tell an important secondary story about price direction. ICE-monitored arabica inventories had fallen to a 1.75-year low of 398,645 bags in November, suggesting tightness. However, this tightness proved temporary. By mid-January, arabica stocks recovered to 461,829 bags—a 2.5-month high that reversed any supply urgency.

Robusta inventory dynamics followed a similar pattern. After reaching a one-year low of 4,012 lots in early December, robusta stocks recovered to 4,609 lots by late January. The pattern of inventory replenishment, combined with production forecast increases, reinforces the bearish case for prices. When warehouses are filling rather than emptying, it signals that market balancing will occur at lower price levels.

Export Trends Reveal Production Imbalances

Brazilian coffee export activity provides real-time insight into supply dynamics. Cecafe reported that Brazil’s December green coffee exports fell 18.4% to 2.86 million bags. Within this decline, arabica exports dropped 10% year-over-year to 2.6 million bags, while robusta exports plummeted 61% year-over-year to 222,147 bags.

This contraction in Brazilian coffee shipments might appear supportive for prices in isolation. However, it reflects timing effects rather than structural supply tightness. The International Coffee Organization (ICO) confirmed this reality on November 7, noting that global coffee exports for the current marketing year declined just 0.3% year-over-year to 138.658 million bags—indicating remarkably stable global supply flows despite Brazilian export fluctuations.

Global Production Surge Points to Extended Pressure

The USDA Foreign Agriculture Service painted a sobering long-term outlook on December 18 with its 2025/26 market projections. World coffee production is forecast to increase 2.0% year-over-year to a record 178.848 million bags. While arabica production is projected to decline 4.7% to 95.515 million bags, robusta will surge 10.9% to 83.333 million bags—creating a structural shift in global supply composition.

For brazilian coffee specifically, FAS projects that 2025/26 production will decline 3.1% year-over-year to 63 million bags. However, this decline is smaller than the global arabica contraction and reflects Brazil’s continued dominance despite the pullback. Meanwhile, Vietnam’s output is forecast to reach 30.8 million bags—a 6.2% increase and a four-year high that deepens competitive pressure.

Most concerning for price support: global ending stocks for 2025/26 are projected to fall just 5.4% to 20.148 million bags from 21.307 million bags in 2024/25. This modest decline in total reserves means the surplus pressures will persist and gradually work through the market over the coming months.

The convergence of factors—ample rainfall supporting brazilian coffee yields, production record highs, vietnamese supply expansion, and stable inventory levels—creates a challenging environment for price appreciation. Coffee traders must adjust expectations downward as global supply dynamics remain decidedly bearish despite the short-term technical recovery seen in arabica futures.