**Coffee Prices Decline as Brazilian Supply Surges**
On February 5, 2023, May arabica coffee (KCK26) fell by $7.65, or 2.68%, while May ICE robusta coffee (RMK26) decreased by $31, or 0.86%. Robust coffee prices reached a six-and-a-half-month low, while arabica dropped to a 15-month low, due to expectations of a record Brazilian coffee crop. Brazil’s National Crop Supply Company (Conab) projected a 17.2% year-over-year increase in production for 2026, expecting total coffee output to reach 66.2 million bags.
The outlook for Brazil’s coffee crop is bolstered by favorable weather conditions, with significant rainfall reported in Minas Gerais, the largest arabica-growing region. Concurrently, Vietnam’s coffee exports surged by 38.3% year-over-year in January to 198,000 metric tons, contributing to bearish trends in robusta prices. In contrast, Colombia, the world’s second-largest arabica producer, saw its January production fall by 34% year-over-year, potentially supporting higher prices in that segment.
