March arabica coffee (KCH26) is up +0.65 (+0.17%), reaching a four-week high due to below-average rainfall in Minas Gerais, Brazil, the world’s largest arabica producer. Recent reports indicated that this key coffee-growing region received only 47.9 mm of rain during the week ending January 2, which is 67% of the historical average. Additionally, the strengthening Brazilian real has discouraged coffee exports.
Robusta coffee (RMH26) increased by +19 (+0.48%), but gains are restrained by surging exports from Vietnam, the leading robusta producer. Vietnam’s National Statistics Office reported a 17.5% year-over-year rise in coffee exports for 2025, totaling 1.58 million metric tons. Meanwhile, US coffee imports from Brazil fell by 52% from August to October due to previous tariff restrictions, although those tariffs have since been reduced.
Looking ahead, Brazil’s coffee production for 2025 has been revised upward by 2.4% to 56.54 million bags, while Vietnam expects a 6% increase to a four-year high of 1.76 million metric tons. Global coffee supplies are expected to rise, with the USDA projecting a 2% increase in world coffee production for 2025/26, despite a decline in arabica output.
